Full Version - Essential Energy

Becoming Australia’s leading utility business
At a glance
The year 2004-2005 was one of success and growth for Country Energy.
Highlights
• Delivered a smooth merger with the former Far West utility, Australian Inland, effective 1 July 2005 – creating
Australia’s largest network operating area across 95 per cent of New South Wales, and adding the new
dimension of a water supply business to our operations
Country Energy is a leading Australian energy services
corporation – managing the nation’s largest power
supply network and retailing energy and related
products and services in five states and territories.
On 1 July 2005, Country Energy and Australian Inland
merged to form a genuine multi-utility.
• 780,000 customers
• Decentralised regional structure responding to
local priorities
• 3,300 employees at more than 140 locations
• Revenue of around $1.6 billion – one of Australia’s
top 150 companies
A leader in safety
• Recorded a profit (after tax expense) of $98.7 million
• Commenced a record $1.2 billion, five year network investment program
The best network manager
A valued part of the community
The new Country Energy serves 95 per cent of New
South Wales’ land mass, with a product range including
electricity, natural and bottled gas, internet services
and specialist energy advice. The addition of a water
supply business serving the Broken Hill region adds a
significant new dimension.
• 195,000 kilometres of powerlines, 1.4 million
power poles, 113,000 distribution substations
and 120,00 streetlights
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• Reduced our Lost Time Injury Frequency Rate (LTIFR) from 11.5
to 11.0 (per million hours worked)
• Improved our Injury Severity Index (ISI) from 122.0 to 109.7
• Restructured our core safety team and consultative committees,
developed new corporate and regional safety improvement plans
and improved reporting systems
More information from page 5
• Achieved a 5.5 per cent improvement on average minutes
without supply per customer (SAIDI) – from 371 to 354 minutes
• Became the first Australian electricity utility to link multiple
operational control centres
• Installed new fibre optic telecommunications networks to
16 country and coastal towns
Read about more network developments from page 17
• Opened 10 new customer and field service centres – adding to
a total of 33 customer and field service centres opened since
Country Energy was formed in 2001
• Achieved the lowest rate of investigations per customer by the
Energy and Water Ombudsman of New South Wales (EWON)
• Expanded our Country Support hardship assistance program
– helping to halve customer disconnections for non-payment
See further details from page 35
Retail operations spanning New South Wales,
Victoria, Queensland, South Australia and the
Australian Capital Territory.
A successful national retailer
• Achieved an 85 per cent overall customer satisfaction rating
• Answered 75 per cent of calls to our call centres within 20
seconds – and was the only Australian company to win an award
at the 2004 Utility Awards for the successful deployment of new
Customer Information System software
• Recorded a customer retention rate of more than 99 per cent,
more than four per cent above target
See more retail successes from page 11
A responsible environmental manager
• Negotiated the largest carbon sequestration deal brokered under
the NSW Greenhouse Gas Abatement Scheme – will see 30,000
hectares of new mallee eucalypts planted in regional New
South Wales
• Launched Australia’s first trial of advanced ‘smart metering’
technology, featuring an in-house cost and consumption
display unit
• Signed up our 6,000th new countrygreen TM energy customer
– a genuine accredited Green Power product
More information from page 27
An employer of choice
• Won a gold medal for our Indigenous Employment Program in the
New South Wales’ Premier’s Public Sector Awards
• Recruited 58 new apprenticeships in 2005 – boosting the number
of apprenticeships created in the past four years to more than 280
• Recognised almost 300 employees with Service Milestone Awards
for a collective 6,215 years of service
Read about new employee development programs from page 43
A network spanning mountains, plains and deserts, with climates
ranging from snow to extreme heat. Following the merger with
Australian Inland, the new Country Energy serves 95 per cent
of New South Wales’ land mass (shaded area).
Northern Region
Far North Coast Region
North Western Region
This year’s report is titled ‘Growth’, reflecting our expansion into Far West New South Wales and water supply, our growing intake of
apprentices and trainees, and our increasing investment in the electricity network and the communities we serve.
Far West Region
Mid North Coast Region
‘Growth’ also reflects our sincere hope that the drought affecting much of New South Wales will soon end.
Central
Western Region
1888
Tamworth is southern
hemisphere’s first
town to have electric
streetlights.
1904
Sydney turns on its first
electric streetlights.
1920
Australia starts
producing electrical
meters.
1995
NSW Government
changes the State’s
25 distributors to six
corporations, including
NorthPower, Great
Southern Energy,
Advance Energy and
Australian Inland.
1997
Great Southern Energy
purchases gas business
from Wagga Wagga City
Council.
1998
National Electricity
Market commences.
NSW appoints an
Energy Industry
Ombudsman.
2001
Advance Energy, Great
Southern Energy and
NorthPower merge to
form Country Energy.
2002
NSW introduces full
retail competition
for electricity and
natural gas household
residential customers.
2005
Australian Inland joins
Country Energy.
South Western
Region
Riverina
Region
South
Eastern
Region
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Building a sustainable future
For the first time, this year’s annual report has taken
a new direction by incorporating a snapshot of our
sustainability initiatives and goals for long-term success.
A challenge for any business is to balance financial
performance, environmental protection and social
responsibility. The table below demonstrates that
everything we do enhances all three dimensions of
sustainable development.
For Country Energy, sustainability goes far beyond
financial returns and statistics. As community
expectations change, we are committed to making a
broader contribution – not because we see ourselves
as a charity – we believe that supporting communities
makes good business sense.
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FINANCIAL
• Delivered profit (after tax expense)
of $98.7 million – page 63
• $1.2 billion investment in network
over the next five years – page 18
• 5.5 per cent improvement on
average minutes without supply per
customer (SAIDI) – page 20
• 85 per cent overall customer
satisfaction rating – page 12
• Expansion into South Australian
residential and small business
retail markets – page 13
• Installed new fibre optic
telecommunications networks in
16 country and coastal towns –
page 25
• Safety team restructure, new safety
improvement plan – page 6
• Virtual control room to manage
power network – page 23
• Call centre developments to create
virtual environment and further
improve customer service – page 13
ENVIRONMENTAL
• Commissioning of stage one of Lake
Bonney Wind Farm – page 29
• 6,000 new countrygreen TM energy
customers since November 2004
– page 14
• Signed landmark carbon
sequestration deal – page 30
• Australia’s first trial of residential,
smart metering technology –
page 28
• Award winning energy efficiency
pilot project – page 28
• Met all greenhouse gas abatment
and renewable energy targets
– page 30
• Using 100 per cent green power at
more than 280 Country Energy
sites – page 32
• New environmental management
system in preparation for ISO 14001
certification – page 32
• Energy efficiency business – energy
answers – page 14
• Popular new energy wise calculator
on website – page 28
• Utilising more fuel efficient vehicles
and increasing gas-powered and
hybrid vehicles – page 34
SOCIAL
• Lowest rate of investigations per
customer by the Energy and Water
Ombudsman of New South Wales
(EWON) – page 39
• Expanded Country Support hardship
assistance program – page 37
• Opened 10 new customer service
and field service centres in
2004-2005 – page 37
• Powerful Staff and Powerful Health
initiatives to help become an
employer of choice – page 46 and 8
• $1.7 million community sponsorship
program – page 40
• Award winning Indigenous
Employment Program – page 44
• Two way flow of information through
community consultative committees
– page 40
• 90 per cent community satisfaction
rating – page 36
• Improved safety scorecard – page 6
• Extensive public safety campaign,
including national energy industry
safety field days – page 9
• Emplyee frontline management
and career development programs
– page 47
While this report complies with New South Wales Annual Report legislation and considers some principles
of the Global Reporting Initiative (GRI), it has not been independently audited in this regard.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Priorities in 2004-2005
Country Energy remained focussed on our goal of
becoming Australia’s leading utility business.
A performance reporting system – known as our
‘corporate dashboard’ – provides the structure and
processes for assessing our achievements against
our ambitions.
The Strategy Statement below summarises our
direction and establishes measures and targets that
create a clear, common purpose. Translated into a
logical set of performance measures in our dashboard,
it represents our blueprint for the future.
Key focus areas in 2004-2005 included safety,
financial performance, customer satisfaction, business
effectiveness and organisational health measures.
The challenge for 2005-2006
Corporate initiatives to drive further progress in
the year ahead include continuing our safety and
customer satisfaction programs, realising productivity
improvements, undertaking a workforce planning study
and focussing our efforts on network reliability.
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COUNTRY ENERGY ANNUAL REPORT 2004–2005

Chairman and Managing
Director’s report
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Country Energy broke new ground in 2004-2005.
We enjoyed widely acknowledged successes,
commenced a major cultural shift and set about
meeting our customers’ increasing expectations
– all in a challenging commercial environment.
The ultimate reward was the announcement of our
merger with Australian Inland in November 2004.
Country Energy was itself formed through the
successful three-way merger of smaller energy
suppliers and has never looked back. Our track record
shows that we have the capacity to improve service
delivery and reliability, viably compete against larger
urban retailers, harness economies of scale and
promote sustainable jobs growth.
The merger with Australian Inland means that Country
Energy’s operating area spans a massive 95 per cent
of New South Wales’ land mass and confirms Country
Energy’s position as operator of Australia’s largest
power network.
With the addition of water services in Broken Hill and
surrounding townships, Country Energy has become
a genuine multi-utility. The merger has also given
both organisations the benefit of combined resources,
expertise and clout.
Our decentralised structure ensures decision making
reflects local priorities. At the same time, our corporate
scale allows us to provide the infrastructure needed to
support effective frontline service delivery.
Underpinning the growth of our customer base is a
capacity to market and deliver competitive products
and services. We have a proud record of building and
maintaining customer relationships, operating customer
service infrastructure and realising the significant value
of the Country Energy brand.
Building on last year’s strong financial performance,
we delivered an excellent result for our shareholders,
providing an after tax profit of $98.7 million. This was
ahead of target for the fourth year in succession.
Continued strong growth in operating revenue
and careful management of our expenditure were
contributing factors. This result is particularly pleasing
as it was achieved in a more competitive environment
than a year ago.
Country Energy remains acutely aware of the challenge
of securing new energy supplies while reducing
the environmental impacts of energy use. We have
adopted a suite of responses, including innovative
energy efficiency initiatives, buying energy from
renewable and low emission generators and reducing
the impact of our own energy consumption. These
measures contribute to a better balance of energy
security and environmental sustainability.
New opportunities may arise from policy reforms under
consideration by the New South Wales Government, as
first articulated in the Energy Directions Green Paper.
Country Energy submitted a comprehensive response,
focussing on our expertise as a dedicated regional
energy supplier, and putting forward proposals to
create an even more competitive retail business while
encouraging new investment in generation capacity.
Our Board will continue to demand high standards
of the corporation, setting ‘stretch’ targets to drive
performance improvement. We acknowledge the
contribution of our Board to the governance of the
organisation, and we thank fellow directors for their
guidance.
Most importantly, we sincerely thank Country Energy’s
employees for their hard work, passion and dedication.
This report records many achievements of which all
employees can be proud.
Barbara Ward
Chairman of the Board
Craig Murray
Managing Director
COUNTRY ENERGY ANNUAL REPORT 2004–2005

A leader in safety
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COUNTRY ENERGY ANNUAL REPORT 2004–2005

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Becoming a leader in safety was targeted as the first
of our top six objectives in 2004-2005. We are pleased
to report a reduction in the severity of injuries, with our
average time lost reducing and workers compensation
claims costs falling.
Safety scorecard
Our Lost Time Injury Frequency Rate (LTIFR) of 11.0
(per million hours worked) is down from 11.5 last year.
The Average Time Lost (ATL) is also down, from 11.2 to
10.0, while the Injury Severity Index (ISI) dropped from
128.6 to 109.7. There were 70 lost time injuries during
the year, a slight increase on the 69 lost time injuries
last year.
Improvements during the year, together with new
safety initiatives, plans and projects implemented in
mid to late 2004-2005, will reflect significant progress
in the 2005-2006 reporting period.
Period
July 2004
June 2005
June 2006
Target
Safety statistics – the year in review
LTIFR
11.5
11.0
5.0
ISI
128.6
109.7
50
ATL
11.2
10.0
10.0
Future goals – continued reduction in LTIFR to less
than five, and reduce Injury Severity Index to less
than 50.
Honour roll
Five employee groups demonstrated exemplary safety
standards by maintaining an untarnished safety record
for more than 10 years. A further 38 groups have not
recorded a lost time injury (LTI) for between eight and
10 years.
YEARS
WITHOUT SITE
LTI
DAYS
WITHOUT
LTI
15 Walcha Field Service Centre 5,472
13 Walgett Field Service Centre 4,857
13 Bingara Field Service Centre 4,748
13 Warialda Field Service Centre 4,748
11 Woodburn Field Service Centre 4,268
Improvement plan
Following last year’s full review of safety systems,
processes, practices and culture by internationally
renowned safety experts, DuPont, a new safety
improvement plan was created to make safety planning
more visible across the whole organisation. It outlines
key focus areas for the next two years and contains
detailed plans of all major corporate safety initiatives
designed in consultation with employees, supervisors,
the executive and the Board.
Each initiative was developed to help achieve overall
safety objectives and targets and has an assigned
‘champion’ from the safety team to ensure its
successful implementation.
Other important elements of the plan include regional
safety plans, a public safety plan and a comprehensive
internal safety audit schedule.
Future goals – implement specific safety procedure
training to ensure understanding of the purpose
of policies and procedures. Promote safety culture
by making employees personally responsible for
their safety and their team’s safety – reflected in
organisational health survey results and safety
statistics.
Regional safety plans
Project schedules have been developed by regional
safety coordinators detailing measures to improve
health and safety within their region. These regional
plans form a key component of our overall safety
planning and are developed in consultation with regional
management teams, the safety team and all employees
within each region.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Detailed audit schedules have been developed to
ensure all locations throughout the business are
covered, and any potential safety hazards are identified
and eliminated or minimised. Regular audits, coupled
with corporate and regional safety initiatives, will ensure
our goal of being a leader in safety.
New team structure
Our safety team has been restructured to form a
dynamic team of multi-skilled people totally committed
to creating a safer workplace.
Chief Safety Officer Mark Mulligan was appointed to
lift the profile of safety and deliver on our commitment
to becoming Australia’s safest utility. Other changes
focussed on the key areas of public safety, safety
policy, audit and investigation and health services. New
roles include Manager Public Safety, Manager Safety
Policy Audit and Investigation, Manager Health Services
and a dedicated project manager to assist with planning
and performance and oversee the implementation of
the new safety improvement plan.
Another important development was the appointment
of Regional Safety Coordinators (RSCs), to drive local
safety improvements, ensure decisions are made
quickly and efficiently and assist employees with safety
related issues.
Consultative committee reform
The restructure of our safety committees has helped to
provide a renewed focus on, and sense of ownership
for, health and safety within the company. The reforms
have been well received and feedback and participation
has been very positive.
The foundation of the committee structure is our Health
and Safety Regional Improvement Groups (HASRIG),
which are regionally-based groups that discuss
local solutions and initiatives and focus on effective
outcomes and resolutions.
Any unresolved issues, topics of interest or regional
actions are shared by the HASRIG chair people at
Occupational Health and Safety Corporate Committee
(OHSCC) meetings. This committee helps provide
consistency and momentum to the HASRIGs and is
chaired by an elected member of the HASRIG and
atended by the Chief Safety Officer and other selected
members of the Peak Health and Safety Steering Group
(PHSSG).
The PHSSG is chaired by the managing director and
provides strategic direction to all committees. It is
able to approve any proposed actions (requiring joint
executive approval), review safety improvement plans
and align policies with decisions resulting from HASRIG
or OHSCC actions.
Managing incidents and
improvements
All safety incidents and injuries are reported on a Works
Improvement Notice (WIN) system, which has proven
an effective tool in managing safety, environmental and
network incidents, improvements and suggestions.
The system was enhanced this year to link with
our workers’ compensation system, ensuring more
accurate reporting and investigation of incidents.
The fact that employees are comfortable in reporting
safety related matters is demonstrated by the fact
that there were 837 safety related WINs raised (193
incidents, 644 injuries) during 2004-2005. This was an
increase on the 829 (188 incidents, 641 injuries) raised
in 2003-2004.
An incident investigation procedure was also developed
to provide guidelines for investigating the root
cause and contributing factors of safety incidents so
subsequent corrective and preventative action can
be taken. The procedure has already proved effective,
identifying several corrective and preventative measures
to assist in managing risks, and avoiding future safety
incidents.
Motor vehicle safety
To reduce the number of motor vehicle accidents,
several recommendations have been devised by an
assigned team, which includes members of both the
fleet and safety teams.
Safety accessories, such as cargo barriers, reversing
alarms, safety steps, first aid kits, fire extinguishers
and night driving lights for ‘on call’ vehicles are being
placed on new fleet and there is a strong focus on
eliminating ‘at risk’ driving behaviours. An updated
driver’s handbook has also been distributed, with
changes including a new vehicle inspection checklist
and information on what to do in a roadside breakdown,
how to identify and avoid driver fatigue, tips for different
driving conditions and driving and parking hazards.
Future goals – 25 per cent reduction in motor vehicle
accidents and deliver education campaign for all
employees in 2005-2006.
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COUNTRY ENERGY ANNUAL REPORT 2004–2005

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OH & S management system
Prior to developing this Occupational Health and
Safety Management System (OHSMS), the previous
distributors that now comprise Country Energy, had
robust safety systems. The merger presented an ideal
opportunity to integrate the best features of the existing
processes and systems and incorporate additional best
practice features.
This integration process is now complete, resulting
in a comprehensive OHSMS, which is functional
in the workplace and designed to comply with AS/
NZS 4801:2001 – Occupational Health and Safety
Management Systems Standard. An independent audit
of the system will commence in August 2005, expected
to be followed by certification in late November.
Future goals – maintain compliance with AS/
NZS 4801:2001 – Occupational Health and Safety
Management Systems Standard.
Lifting the profile
Unique, bright yellow notice boards have been erected
at all sites to provide an easy point of reference for
safety information. This is helping to lift the profile of
safety and demonstrates our commitment to creating a
safe and healthy workplace. Employees decide on the
items for display and typical information includes –
• Days since the last Lost Time Injury at the site
• Regional and corporate Lost Time Injury Frequency
Rate history graphs
• Hazard alerts, injury advice or incident notifications
• Powerful Health promotions
• Health and Safety Regional Improvement Groups
information
• Safety tips.
Knowledge is power
Sharing safety information has become more
sophisticated. In addition to company-wide internal
communications and the new notice boards, we have –
• Introduced refined safety inductions for all new
employees and contractors, which helps ensure
everyone starts from a common platform and
understands that safety is our number one priority
• Conducted safety behavioural sessions for all
supervisors to help them better understand their
Occupational Health and Safety (OH & S) role.
Discussions revolved around the links between OH
& S and organisational goals, OH & S legislation,
the identification of key safety issues and leadership
behaviours and the development of practical safety
action plans. The sessions contributed significantly
to the development of regional safety improvement
plans, with an overriding focus on strong leadership
and personal ownership of safety
• Introduced mobile phone text message hazard alerts
to notify work teams of serious hazards. Being
instant, text messages reduce the amount of time
employees are exposed to potential hazards
• Restructured safety committees and improved
consultation to break down some of the
organisation’s safety barriers
• Appointed Public Safety Coordinators to promote
electrical and gas safety to the public.
Safe work methods
Safe Work Method Statements (SWMS) have been
distributed to all field employees, to be used in
conjunction with existing safety management tools,
such as the highly successful Hazard Identification and
Risk Assessment and Control (HIRAC) process.
A SWMS is a working document which outlines the
steps to be taken to complete a particular task, and the
potential hazards and associated risks for each step.
It has three basic elements – job steps, hazards and
identified control measures for each particular task.
Powerful Health
Work occupies half an employed adult’s waking life,
so the workplace is the ideal setting to introduce
health management services. Both Country Energy
and employees stand to benefit from this program,
which includes a flu vaccination scheme, a skin cancer
screening program, fitness assessments, corporate
subsidies for health and fitness activities, healthy theme
months, Powerful Health champions and healthy points
and prizes.
Powerful Health is helping to improve morale and
employees’ quality of life. During the past 12 months,
the program has seen reimbursements for flu
vaccinations and subsidies for the “gap” cost of
skin cancer screening.
Future goals – reduce days lost due to injury to 350
during 2005-2006.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Workers compensation
In addition to providing financial benefits, a focus on
insurance costs can enhance the injury management
process by allowing us to find suitable duties quicker,
reducing Lost Time Injuries (LTIs) and minimising the
time taken for employees to return to normal duties.
Injured workers are provided support through our team
of occupational therapists, regional safety coordinators
and local return to work coordinators, to ensure their
injury and their return to work program is managed in
line with best practice. Country Energy is moving to
a self insurance workers compensation model during
2005-2006.
No longer will employees have to deal with insurance
companies. They will be able to discuss their workers
compensation issues with trained and dedicated
Country Energy employees. In the majority of cases,
dealing with workers compensation in-house will also
reduce the time needed to resolve claims.
Future goals – our estimated Workers Compensation
insurance premium for 2005-2006 is $11.2 million.
Under self insurance, this is expected to reduce to
below $8 million. A key priority next year is to reduce
by five per cent the time taken for injured workers to
return to normal duties.
First aid
First aid procedures have been reviewed to consider
the likely injuries and illnesses that might occur in
the workplace and the number and distribution of
employees (and likely contractors and visitors), size,
layout and location of each worksite. Trained first aid
attendants have been appointed at all work sites and
communicated across the business.
The identification and purchase of first aid supplies was
also rationalised and consolidated through our existing
stationery supplier.
The successful formula for our public safety plan
includes –
• Using a range of communication methods to reach
target audiences including, direct mail, advertising,
media, training videos, safety kits and warning
signage
• Timing campaigns to coincide with high risk safety
periods, such as school holidays and seasonal farming
activities
• Repeated use of the “Watch out, watch out, there
are powerlines about” slogan as our primary
message
• Increased visibility and face-to-face contact with
industry and other organisations, enabling us to help
develop safer work statements and deliver best
practice outcomes
• Attending trade shows, seminars, major field days
and agricultural events, as well as targeted forums
and training sessions for industry, councils, schools,
emergency services and community groups we
consider “at risk”, such as truck drivers, cotton
farmers, pilots and emergency services personnel.
Future goals – to measure the new public safety plan’s
effectiveness, we aim to survey identified “at risk”
groups during 2005-2006, to gauge their understanding
of safety messages.
While we strive to ensure there are no public safety
incidents, our target for 2005-2006 is less than 100
public safety incidents.
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Public safety
Considering the vast and unique nature of our network,
we have a wide range of community groups to
incorporate into our public safety plan. A strategy has
been developed to provide effective communication to
a diverse audience, identifying and addressing the key
areas in which community groups or activities could
pose an electrical safety hazard.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

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ACE campaign
An important part of our new public safety campaign
is an animated power cord called ACE and his
guardian, the safety cross. Using the latest animation
technology, we created lively characters to appeal to
the younger generation and communicate serious
safety issues.
The three new advertisements focus on storms,
substation and agribusiness safety. ACE has also
been incorporated into our internal safety program.
ACE – the star of a new public safety campaign
National safety field days
Almost 1,000 energy industry representatives attended
the 2005 energy industry safety field days hosted
by Country Energy at Tamworth in June – from field
employees and health and safety professionals to
industry suppliers, tradespeople and local government
representatives.
While maintaining the traditional focus on competitions
and exhibitions, Energy Safety Solutions 2005 put
the spotlight back on learning and skills sharing.
Highlights included seminars on lightning awareness,
understanding equipotential bonding, shock incident
investigation, pole top and confined space rescue and
new testing technology.
The annual field days are a major industry event,
hosted by members of the industry in association
with the Industry Safety Steering Committee of New
South Wales (Department of Energy, Utilities and
Sustainability).
Future goals – host highly successful, high-profile
safety field days in 2006.
The year ahead
Nine critical safety processes have been identified for
2005-2006, and each will be thoroughly investigated
and revised to incorporate feedback from employees
and best practice safety solutions worldwide.
The processes, which relate to the majority of incidents
and injuries include –
• Emergency preparedness
• Manual handling
• Working at heights
• Working in a noisy environment
• Working in confined spaces
• Working with and using electricity
• Working with and using gas
• Working with dangerous goods and hazardous
substances
• Working with plant
These critical safety processes will be supported by
initiatives such as Powerful Health, Safety Sense and
workers compensation self insurance.
Future goals – Roll out all initiatives in Far West region
following merger with Australian Inland. Lost Time
Injuries (LTIs) reduced to 35, Medically Treated Injuries
(MTIs) reduced to 130, increased awareness and use
of WIN system to help reduce incidents.
Safety Sense
A new incentive program – known as Safety Sense
– will be rolled out in July 2005 to give employees that
have demonstrated a safe and responsible approach to
their day-to-day work the chance to ‘scratch and win’
a range of instant prizes. Anyone displaying desirable
safety behaviours receives a safety sense scratchie
and employees can also nominate work mates who
they believe have ‘Safety Sense’.
This includes any act, attitude, behaviour, work
practice or suggestion that has a positive effect on our
safety performance or improving safety culture. It can
also include exceptional safety performance such as
resolving an unsafe condition, superior housekeeping
or making an outstanding safety suggestion.
Aimed at reducing lost time and medically treated
injuries and promoting a strong safety culture,
the program encourages employees to actively
demonstrate their commitment to safety in daily
work activities. It hinges on the idea that behaviour
that is rewarded is more likely to be repeated.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

A successful national retailer
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COUNTRY ENERGY ANNUAL REPORT 2004–2005

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Australia has one of the world’s most competitive retail
energy markets – nearly one million customers have
switched gas or electricity supplier since contestability
was introduced. Customer acquisition is a critical area
of our business and plays a vital role in maximising
financial results.
Winning spirit
Country Energy is now one of Australia’s largest energy
retailers, with 780,000 customers in New South
Wales, Queensland, Victoria, South Australia and the
Australian Capital Territory. Our customer growth was
particluly strong in Victoria. Sales activity was mainly
driven by direct sales, enabling us to achieve significant
penetration into markets outside our traditional retail
base.
Our retail expertise extends across all industrial and
commercial sectors – from mines, hospitals and paper
mills to property, agriculture and education. In the
face of strong competition, our blue chip contestable
customer base continued to expand. Major customers
now include –
• World renowned Sydney Opera House
• Melbourne’s Rialto Towers (the southern
hemisphere’s tallest office tower)
• CSIRO
• Dairy Farmers
• SunRice
• Arnott’s Biscuits
• Department of Defence (Australian Government)
• Cadbury Schweppes
• Mirvac Group of Companies.
Our sales team was successful in retaining and
acquiring more than 1,500 commercial and industrial
customers, which resulted in an annual load growth for
2004-2005 of 30 per cent and growth in gross margins
of more than 18 per cent.
Top marks for satisfaction
In a competitive market, our success is determined by
our customer satisfaction and ability to integrate the
needs of our various stakeholders. We took a fresh
approach to customer research this year, by surveying
customers who had contact with the business three to
10 days prior. This enabled a separation of customers’
perception of service versus how they perceived the
actual service received.
Eighty five per cent of customers believe we meet or
exceed what they would expect from an “excellent
energy provider”. Independent survey results have been
maintained at this level for the past three quarters, with
particularly high scores regarding customer service and
our response to supply interruptions.
Throughout the year, there was a steady increase in the
proportion of customers who stated that the service
received in their recent transaction with us exceeded
their expectations – as high as one in four in the last
quarter (March to June 2005).
To understand our customers’ needs, we also conduct
specific product research, monitor service levels across
all regions and exchange information with customer
consultative committees.
As customer service was one of the four core priorities
for 2004-2005, customer satisfaction was a major
organisational initiative throughout the year, with all
areas of the business involved in internal customer
satisfaction focus groups and defining our customer
service culture.
2004-2005 target – 85 per cent customer
satisfaction rating
Outcome – 85 per cent customer satisfaction rating
Future goals – Maintain 85 per cent customer
satisfaction rating in 2005-2006. Strategies include
improving customer service processes and support
systems and developing the skills and knowledge
of our people.
Focus groups
In June 2004, we intoduced an initiative to understand
where there might be blockages to the delivery of
excellent customer service. It involved three months
of investigation, where we researched customers’
perceptions, and hosted 33 focus groups with
internal business units across all regions and areas
of the business. The focus groups identified areas for
improvement and have driven the development of a
new three-year customer service strategy.
Future goals – implement new strategy, including
streamlining processes, improving support systems
and ongoing development of our people.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Looking inside
We recognise that our internal customer satisfaction
must at least equal our external customer satisfaction
levels if we are to further improve customer service.
Our bi-annual internal customer satisfaction survey
gives each business unit constructive feedback they can
use to improve the service they provide. Overall internal
customer service ratings increased from 77 per cent in
December 2004 to 79 per cent in June 2005.
All measures are aligned with our external customer
satisfaction survey and include factors such as
responsiveness, delivering on promises and being
friendly and courteous.
In the future, a team will be formed to represent
all divisions. It will assess issues identified by the
executive and recommend where improvements
can be made.
Individual business unit results have already been
distributed to general managers to discuss with their
teams.
Business unit work groups will be established to
review individual reports and make recommendations.
Ongoing communication is planned throughout the
year to keep all employees up to date on outcomes
and initiatives that result from the survey.
Future goals – achieve an internal customer
satisfaction rating of 85 per cent by June 2006.
Each business unit will set individual strategies for
reaching this goal over the next 12 months.
Expansion into South Australia
Building on our solid reputation with commercial and
industrial customers, we entered the South Australian
domestic market on 14 March, with packages for
residents and small businesses which saves average
premises – using 6,000 kilowatt hours a year – around
$110 in the first year. The package also includes three
months free dial-up internet for customers who sign
up with CEinternet.
Call centre developments
Country Energy’s aim is to make it easy for customers
to deal with us. In September 2004, we introduced
new technology that will link all call centres to create
a virtual environment. When completed in January
2006, we will be able to automatically distribute calls
based on location and the nature of a call, which will
standardise customer service and improve consistency
and quality in call centre operations. This will assist with
handling peak call volumes to better meet customers’
needs.
We will also introduce a multi-dimensional range of key
performance indicators to improve customer service
including call quality, handling time and reports on
the number of customers who wait longer than four
minutes.
2004-2005 target – answer 80 per cent of calls within
20 seconds
Outcome – answered 75 per cent of calls within
20 seconds
Future goals – establish a range of metrics that will
help achieve excellent customer service and deliver a
balance between business performance and customer
satisfaction.
New bill design
A new bill was developed in conjunction with the
Communication Research Institute of Australia (CRIA),
using the latest standards in document design. The
design was extensively tested with customers to
ensure it can be easily understood and the transition
ran smoothly.
2004-2005 target – 81 per cent of customers should
be able to find 90 per cent of the information they look
for and understand, and use 90 per cent of what they
find
Outcome – the new bill was implemented smoothly in
June 2005, with no negative impact on service levels.
A customer survey has not yet been undertaken.
The KPIs established in 2004-2005 will be measured
during 2005-2006
Future goals – reduce customer complaints regarding
the bill format, reduce high bill enquiries and migrate
customers to preferred payment channels.
13
COUNTRY ENERGY ANNUAL REPORT 2004–2005

14
Green sales skyrocket
Since our new green product, countrygreen TM energy,
was launched in November 2004, 6,000 new customers
have signed up (around 150 new customers per week).
For only $1.50 extra per week (including GST), or $78 a
year, countrygreen energy customers can purchase 100
per cent green energy (based on an average residential
customer’s energy consumption of 6.95 megawatt
hours per annum). The program is monitored, audited
and approved through the national Green Power
accreditation program.
2004-2005 target – 50 new countrygreen TM energy,
customers per month
Outcome – an average of 150 new
countrygreen TM energy customers per month,
exceeding overall target by an overwhelming 245
per cent
Future goals – 500 new countrygreen TM energy
customers per month, reach the 10,000 customer
mark during October 2005.
www.countryenergy.com.au
Our website recorded a 53 per cent increase in visits
during 2004-2005. Currently ranked by Global Reviews
as amongst the best websites for all Australian energy
providers (Global Reviews Energy Web Benchmark Q3
Report 2005), the site features popular new functions
such as an energy wise calculator and online direct
debiting.
The growing number of subscribers to the account
management tool, energy.web, particularly amongst
business customers, is also pleasing. The energy.web
tool offers a range of time-saving, innovative features
and can be used to pay accounts by credit card,
access account details, check energy consumption and
previous payment and transaction records. Customers
can also subscribe to receive an email when their latest
account is ready to be viewed.
Total green power customers
9000
8000
Number of customers
7000
6000
5000
4000
3000
2000
1000
0
1 Jul-2004
1 Aug-2004
1 Sep-2004
countrygreen events
Launched in September 2004, this product allows
individuals and organisations from anywhere in
Australia, to make an event ‘green’. Recent users
include the CSIRO, the Department of Energy, Utilities
and Sustainability (DEUS), WWF Australia and Dubbo
City Council. In each case, signs promoted the fact that
“This event is proudly powered by sun, wind, waste
and hydro – 100% renewable energy from Country
Energy”.
1 Oct-2004
1 Nov-2004
1 Dec-2004
Month
1 Jan-2005
1 Feb-2005
1 Mar-2005
1 Apr-2005
1 May-2005
Energy efficiency specialists
Our specialist energy efficiency team, energy
answers, has helped customers from a diverse range
of industries in Queensland, New South Wales, the
Australian Capital Territory, Victoria and South Australia.
energy answers has advised on the installation of
power factor correction and energy efficient lighting
and air conditioning to thermography, energy audit,
motor controls and cogeneration.
1 Jun-2005
1 Jul-2005
During the year, the team formed a partnership with
seven North Coast TAFE campuses, leading to the
project management of more than $350,000 worth
of energy management applications.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

This resulted in the campuses reducing their electricity
costs by 15 per cent. Subsequently, these savings have
been used for further energy management activities.
Recent wins have been both diverse and technical in
nature. Examples include –
• Project managing the replacement of Lord Howe
Island’s $400,000 powerhouse control system for
future development of energy demand requirements
• Standby generation management and audit plan for
18 regionally-based State Emergency Services control
centres
• Implementing efficiency measures at Wollongbar
TAFE, which resulted in 13 per cent reduction
in energy use in first six months – campus now
recognised as a benchmark for others.
energy answers is also assisting retail sales in
increasing gross margin, by leveraging energy efficiency
services when retaining and acquiring retail contracts,
and is implementing a purpose-built customer
relationship management system to provide the
highest possible customer and supplier services.
Future goals – build on relationships with retail
account managers to increase customer numbers and
retain existing clients. Expand into Uninterrupted Power
Supply (UPS), stand-by generation and co-generation
markets.
Environmentally friendly hot water
In conjunction with the Local Government and Shires
Association (LGSA), energy answers has promoted a
competitive offer for Quantum hot water heat pump
systems. The systems significantly reduce water and
heating costs and greenhouse gas emissions, and to
date, more than 900 contracts for their installation have
been secured.
Unlike other solar water heating systems that rely on
heat from direct sunlight, the Quantum system uses
heat pump technology that recovers solar energy from
the warmth in the air, so it can heat water 24 hours a
day, rain, hail or shine. Each unit can produce up to
2,800 litres of hot water every day and uses less than
one third of the energy of conventional electric hot
water systems, significantly reducing running costs.
Future goals – realise the Quantum hot water
product’s benefits by promoting it to more local
councils, TAFE campuses and other education facilities.
Electronic billing
Country Energy heralded a new era in billing for
business customers by launching an online electronic
billing service in June 2005. The hassle-free, one-stop
account management system enables customers to
receive and download their account information via the
web, potentially replacing paper bills.
Designed initially with the needs of large business in
mind – particularly those managing multiple sites – the
service is quick and user-friendly. It allows customers
to view and print tax invoices, download information for
analysis and upload data electronically into their own
financial system. Gone are the days of time-consuming
administrative processes and manual data uploads.
Future goals – expand service to meet growing
demand in the residential market.
Some things just go together
Bundling of products is a selling point sought by many
customers. To meet this demand, we launched a new
dual-fuel campaign to promote the company as a
provider of electricity, gas and LPG – attributes that add
value to the Country Energy brand. The campaign plays
on the idea that ‘some things just go together’, like a
shoe and sock, knife and fork and gas and electricity.
Positioning ourselves as a dual fuel supplier has
become an important goal, with research indicating
that customers prefer to deal with one supplier.
We also conducted a natural gas direct mail campaign
in a number of townships to increase the number of
dual fuel customers.
Roll out of LPG gas
Our LPG customer base continues to grow and now
stands at 3,600. For the year ending 30 June 2005,
Country Energy had acquired 2,178 new customers.
Future goals – continue to expand the LPG business.
15
COUNTRY ENERGY ANNUAL REPORT 2004–2005

16
Natural gas
Work continues to ‘find, keep and grow’ natural gas
customers in New South Wales and the Australian
Capital Territory. We are also working on business
cases to expand into the Victorian and South Australian
markets, which will allow us to offer ‘dual fuel’
contracts incorporating natural gas.
Currently, there are 26,000 commercial, industrial and
residential natural gas customers connected to gas
networks in Wagga Wagga, Uranquinty, Temora, Henty,
Holbrook, Culcairn, Walla Walla, Cooma, Bombala,
Tumut, Adelong and Gundagai.
Major customers include Cadbury Schweppes and the
Department of Defence.
Future goals – expand into other states outside our
traditional natural gas footprint.
CSIRO research partnership
In August 2004, we signed a Memorandum of
Understanding (MoU) with the Centre for Distributed
Energy and Power established by the CSIRO. The MoU
formalises cooperation on research areas which are
of strategic, technical or commercial interest to both
organisations. The partnership has flowed from our
existing relationship as the CSIRO’s energy retailer.
Future goals – continue testing of an unmanned
helicopter prototype to help better manage the
network and inspect powerlines, gas and water
pipelines. If successful, the concept may help to
speed up supply restoration.
A targeted marketing campaign resulted in a significant
increase in customer acquisition when compared to
2003-2004 results. This is a great result in a contestable
ISP market, with more than 400 competitors in New
South Wales alone. Key milestones included the
6,000th CEinternet customer signed up in June 2005
and 500th ADSL customer in January 2005.
CountryWays
Our new-look customer newsletter, CountryWays,
continues to perform beyond expectations. Featuring
interesting and informative articles on subjects such
as energy and water saving tips, safety updates and
product and service offers, the quarterly publication
aims to reward customers for their continued loyalty.
A key measure of the newsletter’s effectiveness is
customers’ participation rates. Every competition is
monitored to ensure future offers are fine-tuned to
customers’ needs.
2004-2005 target – 15 per cent increase in customer
participation issue on issue
Outcome – increase in participation was 62 per cent
above target
Future goals – 15 per cent increase in customer
participation issue on issue, thereby retaining
readership levels and contributing to customer
satisfaction and loyalty.
CEinternet milestones
Over the past 12 months, there has been significant
strategic change at CEinternet. By migrating technical
operations to a virtual internet service provider
arrangement, we have achieved full virtualisation
of all technical operations – the most cost sensitive
part of the ISP business.
More practically, this has provided –
• National coverage on a single 019 dial number
• National ADSL coverage
• Enhanced customer self service by allowing
customers to manage their own mailboxes and
passwords and check downloads in real time
• Electronic ADSL.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

The best network manager
17
COUNTRY ENERGY ANNUAL REPORT 2004–2005

18
When Country Energy formed in July 2001, we began
a long-term program to upgrade our network, improve
supply reliability and lift overall service levels. In the
past four years, we have spent more than $560 million
on our network and associated services, with plans to
invest an additional $1.2 billion between 2005 and 2009.
$187 million investment
The past 12 months has seen substantial investment
in our network – all aimed at cementing the reliability
of our unique regional electricity network and catering
for increased demands and the rising expectations of
our diverse customer base. More than $187 million was
spent on the network during 2004-2005, with a further
$1.2 billion pledged for the next five years.
The challenge of distributing a safe and reliable power
supply to such a vast geographic area, which includes
some of the fastest-growing areas of the State,
requires innovative, state-of-the-art solutions and
forward thinking.
Major initiatives of the past 12 months included the
conversion and re-construction of sub-transmission
powerlines, construction of new zone substations and
the upgrade of major powerlines.
Network investment by region
Northern – $14.8 million
North Western – $18 million
Far North Coast – $41 million
Far North Coast Region
Northern Region
North Western Region
Mid North Coast – $29 million
Mid North Coast Region
Central
Western Region
Central Western – $9.3 million
South Western
Region
Riverina
Region
South Western – $8.3 million
South
Eastern
Region
South Eastern – $19 million
Riverina – $20.5 million
COUNTRY ENERGY ANNUAL REPORT 2004–2005

The table below highlights some examples of projects that will be partially or fully completed in the next five years.
Area Project Amount Key dates
Albury
Ballina
Install new transformer and construct 132kV
powerline to Corowa to increase capacity and
improve reliability
Major upgrade and expansion of the
existing Ballina zone substation to increase
capacity and improve reliability
$2.7 million Due for completion
by December 2006
$2.5 million Due for completion
by July 2006
Lennox Head
Bathurst
New zone substation at Lennox Head to
supply Lennox Head area, currently supplied
by Ballina zone substation
$2.5 million Due for completion
by July 2008
Construct a new powerline for the industrial area
at Raglan as backup supply for major industrial
customers as well as improving reliability to urban
and rural customers
$300,000 Due for completion
by December 2005
19
Coffs Harbour
Dunedoo
Condobolin
Lismore
Murrumbidgee
Tweed Heads
Wentworth
Tamworth
Construct Moonee to Coffs Harbour North
66kV power line to improve reliability
Construct new high voltage powerline from
Dunedoo to Coolah Village to increase capacity
and improve supply quality
Upgrade Condobolin to Tallebung
powerline to 33kV to increase capacity
and improve supply quality
Construct new zone substation to supply
Lismore University and surrounding area
Construct 132/11kV Griffith substation
132kV transformer bays, 3000amp SWBD
building and 132/11kV transformer to meet
increased demand
Construct new zone substation at Cobaki
to increase capacity
Install 66kV powerline and feeder bay
at Dareton to cater for increased demand
Rebuild Oxley Vale zone substation
to cater for load growth
$3.2 million Due for completion
by July 2006
$250,000 Due for completion
by December 2007
$630,000 Due for completion
by December 2005
$3 million Due for completion
by July 2007
$3.2 million Due for completion
by December 2006
$3 million Due for completion
by July 2008
$3.2 million Due for completion
by November 2005
$3.8 million Due for completion
by December 2006
COUNTRY ENERGY ANNUAL REPORT 2004–2005

20
Supply reliability
There was a 5.5 per cent reduction on the average
minutes without supply (SAIDI) – from 371 to 354
minutes per customer. The average duration of each
recorded interruption was 104 minutes.
This is an excellent result, especially considering a
project to improve the accuracy of supply interruptions
data, which was expected to increase base figures by
20 per cent. Interruptions are now recorded by major
powerline segments instead of the entire powerline,
enabling relatively poorer performing parts
of a powerline to be identified and investigated.
Facing the elements
Floods, snow, electrical storms, bushfires and even
a mini cyclone placed significant demands on our
people this year, from field crews, dispatch and control
teams to supply interruptions, call centres and regional
management teams.
The 2004-2005 storm season was the most severe
since Country Energy was formed. On one occasion,
storm damage affected around 75,000 customers and
field crews attended to more than 350 major and 2,800
smaller repair jobs over four days.
Other wild weather examples include –
Future goals – complete project to improve accuracy
of supply interruptions data during 2005-2006,
ensuring a truly accurate picture of the state of
the network. Ensure Network Management Plans
(Queensland and New South Wales) are accredited
and audited successfully – AS/NZS 4801. The 2005-
2006 year will see further work regarding the external
review of processes, setting planning criteria for
capital expenditure and resources, defining customer
expectations and improving supply reliability reporting
methods.
Average minutes off supply
per customer
375
370
Average minutes off supply
per customer
365
360
355
350
345
375
370
365
360
355
350
345
Unplanned interruptions
Unplanned interruptions
2003-2004 2004-2005
• Torrential rain in Lismore – 500mm in 30 hours.
Field crews had to use helicopters to access areas
cut off by flooding
• Mini cyclone in the Bega Valley – more than half
of Tathra’s residents were without power and field
crews worked tirelessly through the night to restore
power. One resident who lost the roof off his house
made a tearful statement on ABC radio praising our
field crews “who came out to make it safe for people
to move around”
Year
2003-2004 2004-2005
Year
Seasonal pattern of unplanned interruptions
Average minutes off supply
700
600
500
400
300
200
100
0
Average minutes off supply
Jul-04
700
600
500
400
300
200
100
0
Aug-04
Sep-04
Seasonal pattern of unplanned interruptions
Oct-04
Nov-04
Dec-04
Jan-05
Feb-05
Mar-05
Apr-05
May-05
Jun-05
Jul-04
Aug-04
Sep-04
Actual
Oct-04
Nov-04
Dec-04
Jan-05
Target
Feb-05
Mar-05
Apr-05
May-05
Jun-05
COUNTRY ENERGY ANNUAL REPORT 2004–2005
Actual
Target

• Large snowfalls in the Snowy Mountains, where field
crews had to shovel through snow to access Perisher
zone substation
• Bushfires in Parkes – destroying up to 8,000 hectares
of land and causing significant network damage.
Twenty six poles had to be replaced over two days
• Twenty-eight thousand lighting strikes in one night in
Orange – extra crews from across the region called in
to repair the damage.
Our decentralised workforce allows the rapid
deployment of employees and resources in
emergencies. For instance, in October 2004 field
crews from Grafton, Lismore, Ballina, Taree, Bathurst,
Orange, Parkes and Forbes joined local crews in Coffs
Harbour to quickly restore power to more than 15,000
customers following severe storms and flooding.
Independent review
In October 2004, Country Energy invited a Price
Waterhouse Coopers’ partner and consulting electrical
engineer to undertake a high level independent
assessment of our network asset management
strategy. Conducted over three months, it relied
on a mix of internal data, published information and
interviews with managers and frontline employees.
In February, the review authors reported that –
Our overall assessment is that Country Energy
is heading in the right direction. By and large the
appropriate systems and procedures are either in
place, in the process of being put in place, or there
are plans to put them in place at some stage in the
next one to two years. Clearly, there is a great deal
of work yet to be done, but we gained confidence
that Country Energy has assessed the position well,
knows what needs to be done and has plans in
place to achieve its aims (page 8).
The authors recognised benefits in our decentralised,
regional management structure, reporting that –
This allows local problems to be focused upon
by management who are close to, and should
understand local issues… While other models are
worthy of consideration we believe that the structure
currently in place has served Country Energy well
(page 65).
While we were reassured by the review’s findings,
there is still much work to be done. We recognise there
are further process improvements that we must make.
Future goals – implement review recommendations
to achieve industry leadership in network asset
management.
Better asset management
Our asset management strategies and policies are
well established, covering network planning and
development, project design and management, risk
management, reliability management, engineering
standards, safety, network operations and maintenance.
Our commitment to best practice asset management
strategies is reflected in our Network Asset
Management Plan, which employs the New South
Wales Government’s Total Asset Management System.
This plan details strategies to manage the entire
network and invest in capacity and reliability-driven
augmentation, asset maintenance, refurbishment and
demand side management. The plan applies these
strategies over the life of an asset, from construction
to replacement or disposal and has three major
elements – capital investment strategic planning, asset
renewal and replacement strategic planning and asset
maintenance strategic planning.
AMOSS
During the year, our Asset Management and Operating
Support System (AMOSS) was extended to include
details of all zone substation protection equipment.
A project is also underway to load and manage zone
substation maintenance.
The system is accessed by a wide cross section of
the business, with 1,200 registered users. Since
its deployment last year, it has proved useful as
a consolidated asset management system for all
electricity network assets. The AMOSS applications
provide automated transfer of asset data and a fieldbased
mapping application for more than 100 asset
inspectors and provides the mechanism for a further
100 design project managers to create and manage
network extension and system augmentation projects.
Production of geographic map books for field staff is
currently underway, with many field service centres
already realising the benefits of a consolidated data
source and application functionality designed to
increase field operations productivity.
Future goals – complete the geographic map books
for field crews, expand system to accommodate
gas network assets and the management of zone
substation maintenance.
21
COUNTRY ENERGY ANNUAL REPORT 2004–2005

22
High voltage network projects
More than $109 million worth of sub-transmission
capital works projects were completed during 2004-
2005, including –
• Line route selection and land procurement projects
• Line design and construction projects
• Zone substation and maintenance projects
• Protection, load control and supervisory control and
data acquisition (SCADA) installation and upgrade
projects.
Planning for new powerlines
A new powerline route selection program is underway
to deliver new sub transmission powerline routes and
zone substation sites across the network.
Selecting powerline routes and zone substation
sites is a consultative process involving internal and
external stakeholders. New network infrastructure
development will be occurring across all regions in
the coming years. Under the program, new projects
will initially concentrate on assessing sites and routes
so the specific areas for planning and investigating
can be refined. The more advanced projects will
include landowner negotiations, environmental impact
assessments, approvals, surveys and land acquisitions.
Works planning and scheduling
There has always been a need to provide consistent
and effective means to manage our maintenance and
capital works program and ensure any efficiency or
productivity improvements are identified and effectively
implemented.
A works management business improvement project
has been underway to improve the way we manage
resources, by aligning the process across all regions
and introducing a uniform, real-time dynamic tool
capable of providing benefits at an individual field
service centre level on a daily basis.
Major benefits include –
• Better matching workload with available resources,
based on business priorities
• Setting priorities, scheduling time and allocating
designers, crew and plant equipment for the
planning, authorisation and execution of work packs
• Monitoring progress and status of work packs
• Taking a regional and an inter-regional view of
resource availability
• Improved forecasting and reporting ability, increasing
efficiency and project handling.
Future goals – complete the project to deliver
improved regional management, consistency in work
delivery, more efficient warehouse operations and
improved monitoring, work and resource control, risk
management, budgeting and commercial decision
making.
Asset inspection
A more stringent audit for the traditional asset
inspection process has been introduced to ensure
a consistent approach across our distribution area.
A key function of the audit is to provide accurate
feedback that will dovetail into further mentoring and
training of asset inspectors on a one-on-one basis.
This helps ensure they have a thorough and up-to-date
understanding of the key factors which impact on the
selection of assets which require maintenance.
Added benefits include better management of costs,
ensuring defects are reported correctly and in the
time frames required, providing management with an
unbiased perspective on the inspection process and
expanding best practices across the regions.
Mod–Shock
New, non-invasive pole inspection techniques are being
trialled to provide greater accuracy in assessing the
condition of the network. An example is a trial of a
Mod-Shock device on approximately 2,000 poles in the
Mid North Coast region. The device reduces the amount
of drilling required to determine the condition of timber
assets and provides an indication of the condition of
the pole other than at ground level. Continual drilling
over the years aids in the gradual introduction of areas
where decay and termites can enter a pole, reducing
the life of the asset and creating manual labour issues
with excavation and inspection practices.
Mod-Shock uses a seismic test using a hammer blow
as the force and a transducer to pick up the resultant
vibrations which produces graphical and tabular
information on the amount of sound timber/concrete or
steel at sections of the pole where there is a deformity.
Future goals – additional research and/or modification
of Mod-Shock before considering the benefits of full
implementation across all regions.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Vegetation management
The management of vegetation near powerlines
is a substantial part of our overall maintenance
requirements to ensure a safe and reliable power
supply.
Trees coming into contact with overhead powerlines
can pose serious hazards to people, wildlife and the
surrounding environment, with potential for bushfires,
damage to property, injury and supply interruptions.
Significant changes during 2004-2005 included the
return of some work functions traditionally carried
out by contractors to internal employees and the
appointment of additional vegetation control officers.
Some of these functions include customer liaison,
work consent negotiations, evaluation and pre-listing
of vegetation interaction with network assets.
New contracts have been awarded within those regions
that outsource vegetation maintenance activities to
reflect the changed management approach.
New technology
Technology to streamline the pre-listing process
has seen the development and implementation of a
software application similar to that used by our asset
inspectors. The application runs on pocket PC devices,
with electronic upload and download functionality.
Public education
Raising awareness of the dangers associated with
planting inappropriate species near powerlines
continued to be a major focus, with the promotion of
planting guides and give-away of appropriate species at
community events. We also have measures in place to
encourage customers to seek advice before planting.
Ongoing consultation with councils and community
groups has assisted in the implementation of effective
local vegetation management strategies and achieving
long-term solutions that minimise environmental impact
and the amenity value of community trees.
Virtual control room
Country Energy is the only Australian electricity network
business to adopt a totally digital mode of system
control across multiple centres. Our three-year Virtual
Operations Service Centre (VOSC) project is delivering
improved customer service and flexibility of operations,
by linking centres at Queanbeyan, Bathurst, Dubbo and
Port Macquarie.
It is also helping to –
• Match resources to workloads
• Initiate an instant ‘ramp-up’ in emergency situations
• Provide better information for customers – real time
information updates
• Create a more reliable system – high availability and
scalable architecture
• Improve emergency response capabilities
• Provide for greater employee stability – no need for
employees to travel to other centres when relieving
• Create economies of scale without centralisation
• Improve regulatory compliance – accurate, auditable
reliability reporting
• Ensure cost effective and seamless disaster and
incident recovery.
In December 2004, we opened a $2.5 million
Operations Service Centre in Queanbeyan. The centre
features state-of-the-art equipment to monitor and
control any part of the network from any location and
will improve our ability to coordinate field crews and
communicate with customers.
A new internet protocol phone and radio dispatch
system was installed in 2004-2005, improving system
control productivity by 40 per cent. With the previous
system, phone messages were manually relayed by
radio to the field workers by an operator, who required
two control consoles.
2004-2005 target – improved customer service
Outcome – consolidation of network operations into
Queanbeyan Operations Service Centre increased from
50 per cent to 70 per cent complete, refurbishment
of Port Macquarie Operations Service Centre, and the
retirement of legacy systems that remotely controlled
the network.
Future goals – finalise deployment of a new
computerised system that provides for control room
automation.
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COUNTRY ENERGY ANNUAL REPORT 2004–2005

24
Multi-skilling
Country Energy’s people have specialised skills and
experience developed over 60 years in managing
regional networks. Our field employees in particular
are multi-skilled, which has proved a highly efficient
and practical way of constructing and maintaining a
geographically dispersed network.
Multi-skilled employees often prevent the need to call
on specialist teams who may be several hours away
from a worksite. While our success can be partly
attributed to our unique, decentralised structure, some
highly specialised technical functions, such as zone
substation and sub-transmission powerline design
and construction, as well as overall asset maintenance
strategies and policies are more centralised.
This ensures state-of-the-art capabilities in areas
where technological improvement is a constant.
Price and equity
In July 2004, we introduced a regulated retail price
change for all electricity customers. In July 2004
and May 2005, retail price changes were introduced
for regulated gas customers in the Wagga, Wagga,
Uranquinty Cooma, Bombala, Tumut and Gundagai
regions. All changes were within specific limits set
by the New South Wales pricing watchdog, the
Independent Pricing and Regulatory Tribunal (IPART).
These changes were the first under IPART
determinations, effective from July 2004, which allowed
for modest network price increases over five years and
regulated retail electricity prices over three years.
We also continued a program to introduce a uniform
price list for all new connections. This is part of a longterm
plan to consolidate ‘inherited’ prices, ensuring an
equitable pricing structure for all.
Security
Significant work was undertaken this year to enhance
our business continuity management capability,
including the development of detailed business
continuity plans to ensure the ongoing viability of
critical processes. Our corporate crisis management
and recovery program was also tested and refined in
simulation, to ensure all employees involved in a crisis
recovery are trained and prepared to respond.
Our peak security group continued to develop and
review security management plans for our most
critical assets, including zone substations and major
transmission and distribution powerlines, as well as
overseeing progress towards certification against
Australian Standard 7799 – Information Security
Management.
Improved information protection and security practices
have been implemented to ensure security incidents,
such as computer virus attacks and fraudulent access to
systems, are contained to a minimal level. The team’s
vigilance and advanced systems helped to respond
successfully to a number of potentially significant
attacks on our systems that affected other corporations
worldwide, preventing downtime and information
losses.
A new security manual was added to our policy library,
aimed at preventing security issues – from access to
work sites and protecting valuables to armed robberies,
threatening phone calls and suspicious mail packages.
A guide is also being developed to help employees
understand their personal rights and responsibilities.
Both documents are part of an overall campaign to
increase security awareness.
Future goals – full certification of corporate data
systems against Australian Standard 7799, ongoing
review and refinement of business continuity planning
response capability, and development of an improved
emergency response framework.
Taking the world stage
Country Energy received international accolades when
we were the only Australian company to win an award
at the 2004 Utility Award – taking home the Utility
Customer Relationship Management (CRM) Award for
Australia and the Asia Pacific. The award related to
our integrated Customer Information System (CIS)
and CRM areas and specifically, the successful
deployment of new CIS billing software known as
Energy. The awards were contested by utilities from
virtually every corner of the globe – from gas and water
companies to municipal utilities and other energy
companies.
Our CIS is the backbone of our business and ongoing
upgrades and enhancements are vital to our future
success. Energy enables end-to-end customer
management in one system, ensuring better levels
of customer service.
A second award was presented to our General Manager
Information Services, Patrick Cooper, who was named
Chief Information Officer (CIO) of the Year (for small to
medium businesses) at the third annual IT & T Awards.
He was one of three individuals recognised this year for
being “a driving force for the adoption and execution of
best-practice technology”.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Information services
In addition to Energy, our business boasts advanced
information systems for all functional activities,
including billing, financial management, asset
management, meter data collection, geographical
information and a leading edge interactive website.
We also have the ability to remotely monitor and control
the electrical network, several hydro-generators and
our Wagga Wagga gas operations. In addition, our radio
control network is considered the strongest of its kind
in New South Wales.
Our Information Services division made several changes
throughout the year to improve the way the team
supports other business units. One of these changes
was a new divisional structure, while another was the
introduction of new business activities that reflect
leading global practices.
Future goals – overcome the information services
(IS) and logistics challenge of integrating Australian
Inland customer records into one system following
the merger.
Telecommunications
Several milestones were reached during 2004-2005
in our bid to roll-out new and improved broadband
telecommunications across country and coastal
New South Wales, pursue fresh telecommunications
opportunities and strengthen our multi-utility status.
The installation of broadband cables on power poles
is a popular development in the telecommunications
industry, providing infinite opportunities to roll-out
broadband and deliver longer-term benefits, especially
for remote communities.
By opening up fibre optic networks on powerlines, we
are fully utilising existing infrastructure, accommodating
new broadband services and helping to realise the
potential for telecommunications services in country
areas. The focus is on delivering telecommunications
services through fibre optic cable, wireless local loop
and potentially, powerline communications.
Broadband powerline
Our exploration of Broadband Powerline (BPL) and
Powerline Communications (PLC) technology continued,
culminating in a technical trial in Queanbeyan. BPL
enables powerlines to be used for high-speed data
transfer in much the same way as copper wire or fibre
optic cable.
By utilising our existing network, BPL technology
could provide Country Energy with faster and more
cost effective ways to manage some of our network
activities. The technology could also provide broadband
telecommunications services to areas where
telecommunications infrastructure is absent or existing
alternatives are expensive.
Following bench testing in our laboratory, the technical
trial has successfully demonstrated the merits of BPL
when applied to broadband internet, voice services
and automated meter reading. Exploration will soon be
increased to include a 200 megabit system in a further
20 homes.
Comprehensive analysis and additional bench testing
will take place before a decision is made about the
commercial viability of wider BPL deployment.
2004-2005 target – implement BPL trial to
demonstrate benefits
Outcome – trial successfully implemented
Future goals – expand the trial to assess full
potential.
Voice over internet protocol
During the year, BPL technology passed a major
milestone, with Australia’s first successful delivery
of Voice over Internet Protocol (VoIP) across a BPL
network. The VoIP calls were successfully linked to land
line and mobile phones as part of a trial being carried
out in Queanbeyan by Country Energy and Australian
broadband phone company engin.
This technology has the potential to provide affordable
broadband access without reliance on existing service
delivery options, as every power point becomes a
broadband delivery point.
Future goals – continue 18 month trial, followed by
assessment.
Fibre Towns
A major achievement for our telecommunications
division in the past 12 months was the installation of
fibre optic cable on existing infrastructure in 16 country
and coastal towns.
Known as Fibre Towns, the initiative was a joint project
between Country Energy, the New South Wales Office
of the Chief Information Officer and Soul Pattinson
Telecommunications (SPT). State and Federal funds
were provided for the fibre network construction.
25
COUNTRY ENERGY ANNUAL REPORT 2004–2005

26
SPT is utilising the network for delivery of broadband
internet, high-speed data and teleconference to schools
and hospitals across the State. There is also scope
for the fibre network to be used in delivering distance
learning and remote health services.
2004-2005 target – complete the installation of 95
kilometres of fibre loops in 16 towns
Outcome – loops completed
Future goals – undertake additional fibre
deployments.
Gas developments
Country Energy owns and operates gas networks
comprising 1,000 kilometres of mains and transmission
pipelines serving more than 20,000 customers in
southern New South Wales, including a natural gas
reticulation system in Wagga Wagga.
The gas networks business is based in our southern
regions, and is managed by a small, efficient team,
backed up by service delivery gas technicians and
external contractors.
Major new customers connected to the network during
2004-2005 included Weyheueser at Tumut (300,000
gigajoules) and Wilmott Timbers at Bombala (27,000
gigajoules) as well as 10 large commercial premises
in various towns.
Greenfield connections
Our ‘greenfield’ natural gas networks encompass
the townships of Cooma, Bombala, Tumut, Adelong,
Gundagai, Temora, Walla Walla, Henty, Culcairn and
Holbrook.
In these towns the average three-year population
growth from 2002-2003 to 2004-2005 was 11 per cent.
Meanwhile, in Wagga Wagga, the average three-year
growth from 2002-2003 to 2004-2005 was 6.87 per
cent, mainly due to a large number of subdivisions
completed during the past 12 months.
Investing in our fleet
Country Energy invested $28 million on the upgrade
of plant and vehicles this year, which included eight
new crane borers and 10 ‘bucket trucks’, all built
in accordance with the latest safety standards.
A major bucket truck refurbishment program was
also carried out.
Future goals – continue bucket truck replacement
program and introduce additional program for the
refurbishment of crane borers.
Radio system upgrades
Following the formation of Country Energy, a
standardised voice radio network was required,
including common vehicle communications, to support
field crew mobility and customer safety. For technical
and operational safety reasons, radio equipment has
been upgraded and standardised and the operating
frequency changed to ultra high frequency.
Uniform base radio network
During 2004 and 2005, the first major phase was
concluded, with the installation of more than 130 new
base station radios and construction of repeater sites.
New mobile radios
The next phase involved the review of 2,500 radios
in vehicles at more than 100 locations. One thousand
radios were replaced with new, 1200-channel mobile
radios, enabling roaming between bases.
Enhanced network coverage
An UHF mobile radio network project established a core
mobile radio network across our footprint area. Some
areas, such as the more remote areas of New South
Wales, had poor to non-existent coverage under the old
radio systems.
Several projects were initiated to address localised
coverage problems in areas ranging from the North
West (Bourke and Walgett) to the Snowy Mountains.
For instance, radio coverage was improved in the
Cooma area by installing three additional radio repeater
sites.
Digital radio
Another achievement during the year was the
establishment of wide area data network capabilities
to allow two-way radio conversations with operational
support centres. The voice signals are digitised,
broadcast as data, and reproduced in real time to
overcome natural limits in the radio network.
Future goals – extend a common radio network and
mobile radios to the Far West region during 2005-2006.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

A responsible environmental
manager
COUNTRY ENERGY ANNUAL REPORT 2004–2005

28
From relocating osprey nests from power poles and
planting trees with community groups to trialling
hybrid vehicles and landmark greenhouse gas
abatement deals, Country Energy is involved in a
range of environmental initiatives. Leading the way in
environmental sustainability and social responsibility
makes good business sense.
Our energy conservation and environmental protection
initiatives go beyond legal and regulatory obligations,
towards a position of industry leadership.
During the year, we took a four-pronged approach to
environmental sustainability and renewable energy,
concentrating on the efficient use of energy, reducing
greenhouse gas emissions, energy efficiency and
commercial partnerships.
Two of Country Energy’s most immediate challenges
are energy efficiency and the search for alternative
energy sources. We have enlarged our suite of energy
efficiency initiatives, delivering tangible environmental
and financial benefits.
Our aim is to integrate responsible environmental
management into all that we do.
Smart metering trial
An Australian-first trial of new advanced smart metering
technology has shown abundant potential, with
participants using real time information to run more
energy efficient homes.
Launched in February 2005, the demand side
management initiative aims to encourage customers
to change energy usage based on pricing alerts.
This reduces consumption in times of high demand
and allows customers to save on energy costs.
Involving 150 residential customers in Queanbeyan
and Jerrabombera, the smart metering trial – gives
participants access to real time information about
energy consumption and costs thanks to an innovative
in-home display unit. By using the display unit to
monitor daily, weekly and monthly consumption
patterns, participants can instantly see how much
energy they are using and how much it is costing.
Large families in particular are pocketing significant
savings, with a family of five reducing consumption
by 25 per cent compared to the same period last year.
This has resulted in a saving of $31 off their quarterly
account.
Future goals – continue trial until June 2006, followed
by research and analysis of trial outcomes, with a view
to making the technology more widely available.
Energy wise calculator
More than 5,000 customers have visited our on-line
energy efficiency service, the energy wise calculator,
since it was launched in September 2004.
The service has the ability to change the way people
use energy in their homes and is smart enough
to generate advice based on an individual’s input.
Essentially, it helps customers calculate energy
consumed by individual appliances, rooms or a
whole house, and provides simple, low-cost energy
saving tips.
The calculator’s value was recognised by Global
Reviews in November 2004, when it was rated as
the best energy calculator available on all Australian
energy providers’ websites (Global Reviews Energy
Web Benchmark Q4 Report 2004). It was also the only
site to be recommended by Choice Magazine (March
edition: “What’s up with our power supply?”) in an
article regarding home energy audits.
As well as being promoted through field days and
marketing material, the calculator is used by call centre
and customer service centre teams when dealing with
high account enquiries and is available to customers in
many customer service centres.
Green Globe Award
Country Energy took centre stage in November 2004 to
accept a major award at the Energy and Water Green
Globe Awards for an energy efficiency pilot project,
which is set to provide a nationwide energy industry
precedent.
The two-year energy efficiency project in the
neighbouring rural villages of Binda and Bigga continues
to help residents save on their power bills, reduce
greenhouse gas emissions and alleviate pressure on
the power supply network, thereby delaying the need
for expensive network upgrades.
Residents have enthusiastically supported the initiative
by attending information sessions and taking advantage
of accredited green energy, energy audits and a rebate
scheme for the replacement of energy intensive
appliances.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

One of the most rewarding aspects of the project
has been supplying customers with almost 100 gas
appliances at discounted rates, to replace old and
inefficient appliances. This substantially reduced
demand for electricity and saved around 80 tonnes
of greenhouse gas emissions.
Boost to green energy portfolio
In May 2005, the commissioning of stage one of
Lake Bonney wind farm, in South Australia, marked an
important addition to our renewable energy sources.
Recognised as one of the largest and most efficient
wind farms in Australia, the facility’s 43 wind turbines
have a total generation output of 80.5 megawatts,
providing enough renewable energy to power around
23,000 households each year.
Country Energy is purchasing all of the energy and
renewable energy credits from stage one under a longterm
commercial agreement.
Thanks to this project, we will be saving more than
200,000 tonnes of greenhouse gas emissions each
year, which would otherwise have been produced from
coal-fired power stations.
In addition to other wind farms in Crookwell and
Blayney, we also purchase hydro-electricity from
stations located near Wellington, Yass, Inverell, Grafton,
Armidale and Dungog; biomass energy (energy
generated from natural materials such as plants and
organic landfill) from Ballina, landfill gas from Rochedale,
Ipswich and Lucas Heights, a food waste to energy
plant in Camellia, Western Sydney; solar farms in
Queanbeyan and Dubbo and rooftop solar systems
across New South Wales.
Future goals – facilitate development of new
renewable energy projects.
29
County Energy’s renewable energy sources
IPSWICH
LANDFILL
ROCHEDALE
LANDFILL
CONDONG –
SUGAR MILL
BROADWATER –
SUGAR MILL
Far North Coast Region
North Western Region
Northern Region
DUBBO ZOO
Far West Region
Mid North Coast Region
DUNGOG
Central
Western Region
BLAYNEY
CAMELLIA – FOODWASTE
South Western
Region
BURRINJUCK DAM
WYANGALA DAM
CROOKWELL
LUCAS HEIGHTS LANDFILL
BERRIGAN DAM
Riverina Region
Biomass
QUEANBEYAN
Hydro
LAKE BONNEY
South
Eastern
Region
Landfill Gas
Wind Farms
WONTHAGGI
Solar Farms
COUNTRY ENERGY ANNUAL REPORT 2004–2005

30
Energy efficiency research
scholarship
A research scholarship focusing on energy efficiency
has been established by Country Energy and Charles
Sturt University. The successful applicant will research
ways to improve the use of energy in rural and regional
areas, with a focus on marketing and economics issues.
Focus areas will include electricity demand
management options, demand for renewable energy
and ways to increase customer acceptance of energy
efficiency options and renewable energy. This will
help us investigate attitudes toward energy use and
conservation, make better planning decisions and
ultimately reduce energy costs and greenhouse gas
emissions.
Landmark deal
A significant greenhouse gas abatement initiative with
private forestry developer CO2 Group Limited was
announced in April 2005 – representing the largest
carbon sequestration (capture) deal under the New
South Wales Greenhouse Gas Abatement Scheme.
The unique partnership involves establishing up to
30,000 hectares of Mallee eucalypt trees across
regional New South Wales in 2006, which will remain in
place for 100 years under Greenhouse Gas Abatement
Scheme rules. The trees will be planted in strips
on existing farms to act as natural wind breaks and
control soil erosion. Other benefits include greenhouse
gas abatement, dry land salinity management and
regional employment opportunities during both the
establishment and ongoing support phases.
Future goals – reduce greenhouse gas emissions by
3.2 million tonnes over six years – the equivalent of
taking more than 177,000 cars off the road.
Meeting greenhouse targets
Country Energy met all organisational greenhouse
gas abatement goals, Federal Government renewable
energy targets, New South Wales Government
greenhouse gas reduction targets and National Green
Power accreditation targets this year.
During the last compliance period, Country Energy
sourced 100 per cent of green power sales from new
(post 1997 built) renewable energy generators, including
wind, solar and hydro. This is 20 per cent above
minimum accreditation requirements.
The Federal Government’s renewable energy target
places a legal liability on wholesale electricity
purchasers to proportionately contribute towards the
generation of an additional 9,500 gigawatt hours of
renewable energy by 2010. Country Energy’s target
for the 2004 calendar year was met.
Commenced in January 2003, the New South Wales
greenhouse gas reduction scheme imposes mandatory
greenhouse gas benchmarks on all New South Wales
electricity retailers.
The State greenhouse gas benchmark is set in terms of
tonnes of carbon dioxide equivalent (tCO2-e) per capita.
The initial level set for 2003 was 8.65 tonnes and the
benchmark progressively drops to 7.27 tonnes in 2007
and will continue until 2012.
Our 2004 calendar year target was met, with more
than 80 per cent of contributions coming from landfill
and waste mine gas generators. These generators
prevent ozone depleting gases and are particularly
environmentally-friendly.
Commercial partnerships
We continue to turn green energy into a commercial
reality, by working with developers to secure new
energy supplies that deliver environmental and regional
sustainability benefits. The key criterion for potential
partners is appropriate technologies, expertise and
financial capabilities. Examples include –
Eastern Star Gas – Narrabri Power Station
While all generation technologies have a role to play in
the future, Country Energy has a unique perspective
on the commercial development of new gas-fired
generation in regional New South Wales. Gas-fired
power stations have both operational and environmental
advantages in responding to the challenges of rising
electricity demand.
Opened in November 2004, the 10 megawatt Narrabri
power station opened the door for natural gas to be
delivered on a commercial basis from a New South
Wales field for the first time.
We have a 10-year commercial agreement to purchase
all of the energy and associated greenhouse gas
abatement certificates from the new station.
For the next one to two years of full-time operation, the
facility is expected to produce enough energy to power
13,000 homes and greenhouse gas abatement of
36,000 tonnes per annum – the equivalent of removing
12,000 cars from the road.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Our increasing involvement in projects such as this
is helping to establish the infrastructure needed
to support future industry growth across country
and coastal New South Wales as well as enhancing
employment opportunities and energy utility services
in regional communities.
Earthpower Technologies – Camellia food
to waste energy plant
This western Sydney-based plant accepts segregated
waste from the industrial and commercial sectors,
turning it into green energy and a high quality fertiliser
product.
The plant processes 210 tonnes of waste each day,
producing sufficient green energy to power almost
4,000 homes and eliminating 106,000 tonnes of
greenhouse gas emissions each year.
Country Energy purchases all of the output of the plant
under a commercial agreement.
Renewable Australia Pty Limited
Our exclusivity agreement with Renewable Australia
extends to 2009 and reflects our commitment to
developing and commercialising technology to recover
methane gas, primarily from small regional landfill sites.
Along with private sector business partners, we have
been working with Renewable Australia in developing
a benchmarking and implementation program in
conjunction with key stakeholders such as local
government.
The landfill gas extraction technology will be combined
with a number of proposed landfill gas energy
generation projects over the next one to three years.
As well as reducing greenhouse gases, the technology
will encourage better landfill management, regional job
creation and improved regional infrastructure.
The first electricity from the $34 million power station
and gas field development is expected to be sold into
the National Electricity Market grid by August 2006.
The agreement will assist Country Energy in meeting
future gas electricity certificate (GEC) requirements
under the Queensland Government’s 13 per cent gas
scheme, as well as covering other green products such
as New South Wales Gas Abatement Certificates if
required.
In addition, the electricity generated from this project
will provide Country Energy with a competitive position
in the Queensland retail electricity market.
In conjunction with private sector proponents, we are
also assessing the feasibility of a number of gas fired
power stations in regional New South Wales. Current
locations include, but are not limited to, the north west,
northern, far north coast, central west, south east,
south west and Riverina regions. Generation capacities
vary depending on the region and infrastructure
requirements.
We are also looking at sites in Queensland’s south west
and coastal regions.
Currently, around 1,000 megawatt hours of generation
capacity from natural gas, biogas or coal seam
methane-related fuel sources is under assessment.
Future goals – over the next three years, we expect
that up to five new generation projects can be
supported to meet our commercial and regulatory
requirements.
31
Arrow Energy – Daandine power station
Country Energy has negotiated a 10-year power
purchase agreement with Arrow Energy NL, the
developer of a 27 megawatt gas fired power station
near Dalby, in south east Queensland.
The power station will be fuelled by 2.2 petajoules per
annum of coal seam gas from Arrow’s Daandine field.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

32
Environmental management system
A new system was developed during the year, in
preparation for ISO 14001 certification. This was a
significant achievement, particularly considering our
geographic diversity and the need for the system to
cover the whole business. All procedures are complete
and the system will be subject to external audit early in
the new financial year.
ISO 14001 is an international standard which
outlines the recognised best practice environmental
management processes. To maintain certification,
we must establish and maintain systems and
practices which include the use of environmental
policies, management plans, risk analysis, continuous
improvement, employee education and training,
emergency preparedness and reporting.
2004-2005 KPI – develop environmental magament
system by June 2005
Outcome – completed
Future goals – obtain and maintain external
certification in 2005-2006.
Greening up our act
Since January 2004, we have committed to purchasing
100 per cent green energy for 282 sites, including all of
our field service centres, 20 customer service centres,
43 offices, 48 zone substations and 42 other properties.
Under the Australian Building Greenhouse Rating
(ABGR) Scheme, eight of our properties were awarded
‘five-star’ greenhouse ratings during the year. The
scheme, administered by the Department of Energy,
Utilities and Sustainability, is a world-first initiative that
rates buildings on greenhouse performance from one
to five stars.
Future goals – achieve ‘five star’ ratings at our
Bathurst and Wagga Wagga premises in the near
future.
Saving more energy
The following initiatives will soon be implemented to
further reduce energy consumption and greenhouse
gas emissions –
• Building Management System (BMS) to manage
lighting and air-conditioning at Port Macquarie and
Bathurst corporate offices
• Quantum Solar hot water systems at Bathurst,
Port Macquarie, Orange and Wagga Wagga
• Power Factor Correction at Bathurst and Orange
• Movement sensors in all stand-alone offices and
meeting rooms
• Lighting upgrade to energy efficient T5 lighting at
Bathurst corporate office
• Timers on all hot water and cooling units in kitchens
• Insulation batts at Port Macquarie corporate office
• Proposed field service centre energy saving
competition involving employees
• Analysis of any new building or refurbishment
undertaken by Country Energy’s energy answers
business, to ensure optimum energy saving
techniques are utilised.
Helping primary producers
The issue of soil contamination around power poles is
of increasing concern for primary producers, particularly
considering the quality assurance requirements from
Meat and Livestock Australia. A standard livestock
production assurance letter for property owners
seeking certification has been developed, outlining our
past practices as well as current chemical application
practices.
The minimisation of soil disturbance during
maintenance work and use of environmentally
acceptable chemicals has reduced any potential impact.
Soil/pole tests are carried out at a customer’s request
if potentially harmful chemicals may have been used in
the past.
2004-2005 target – develop written materials to assist
primary producers in achieving certification
Outcome – completed
Future goals – continue to minimise soil disturbance
and use environmentally acceptable chemicals when
treating poles.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Waste management
A code of practice (CEK8082) was rolled out during
the year and a specialist waste management company
was engaged to implement a comprehensive waste
recording system. This will allow us to consolidate
records and set waste reduction objectives and targets
for the future.
We also rolled out a standard operating environment
for our information technology systems, resulting in
significant rationalisation of printers and associated
cartridges and stationery, with double sided printing
now more readily available.
The continued engagement of transformer
refurbishment contractors has ensured considerable
recycling of materials that are scrapped and prolonged
the use of existing transformers. The immediate return
to service of transformers that were up to 10 years
old has now been extended to 20 years, reducing the
number of transformers that require refurbishment and
subsequent oil disposal.
Future goals – Set specific targets for each field
service centre to achieve greater waste reduction and
encourage further recycling.
Waste recycling and purchasing
To further enhance our approach to waste recycling,
the following initiatives have been adopted –
• Paper and cardboard recycling centres and waste
paper recycling bins at all locations
• Shredding of paper for a variety of activities,
including worm farms
• Sound general waste practices, including the use
of Advance Document Systems to manage waste
contractors and ensure employees and contractors
separate general waste from recycling prior to
collection, effectively reducing volumes sent to
landfill.
Solar power customers
More residential customers have taken advantage of
the Commonwealth Government rebate schemes for
solar power, with a large numer of customers now
selling excess energy generated by solar panels back
to Country Energy.
Policies and procedures were developed during 2004-
2005 to support the installation of residential solar and
small renewable energy generation units. This number
is expected to grow as customers become more aware
of renewable energy benefits.
2004-2005 target – implement ‘Solar Solutions’ and
‘Small Scale Generation’ processes
Outcome – completed
Future goals – assist more residential customers in
connecting solar systems and small generators to
offset their energy accounts and reduce greenhouse
emissions.
Energy management survey
The need for energy audits was highlighted in a
research study into the energy and water management
measures of 153 New South Wales local councils
and shires. The Country Energy-commissioned
benchmarking study of Local Government and Shires
Association (LGSA) members revealed that one in
five councils is highly active in energy and water
management and a quarter of participating councils
have an energy management plan.
The purpose of the study was to assist councils in
better monitoring their energy and water management
programs and identify opportunities to lower costs and
reduce greenhouse gas emissions.
Encouragingly, about 66 per cent of councils who do
not yet consider themselves leaders in the field, are
now seeking advice and information about better ways
to manage resources.
Future goals – Assist councils to better monitor
energy and water management programs, become
more energy and water efficient and reduce
greenhouse gas emissions. Our dedicated government
account manager is also planning to conduct regional
forums on best practice solutions.
33
COUNTRY ENERGY ANNUAL REPORT 2004–2005

34
Noxious weed guide
During the year, we released a weed guide to help field
employees identify noxious weeds and prevent their
spread. The guide describes a range of the more easily
spread plants and their characteristics, and a colour
photo to assist with identification.
Given that we manage Australia’s largest power supply
network, we recognise that employees must take care
to prevent the spread of noxious weeds in New South
Wales and declared plants in Queensland.
A new procedure has been put in place for field teams
to confirm the action required if they encounter noxious
weeds, and the best way to clean down vehicles after
coming in contact with these weeds.
Green fleet
We continued to utilise more fuel efficient vehicles
this year by increasing the number of gas-powered
and hybrid vehicles – keeping the environment and our
bottom line healthy at the same time. There was also
a significant reduction in the number of large petrol
engine vehicles.
Country Energy is moving towards an LPG autogaspowered
fleet because autogas vehicles typically
produce 10 to 15 per cent less carbon dioxide (CO 2 )
emissons than petrol fuelled variants of the same
model.
Various green fleet initiatives throughout the reporting
period saved an estimated 40 additional tonnes of
greenhouse gas emissions. Meanwhile, the lower
cost LPG autogas reduced our total fuel bill by at least
$15,000 per month.
Our fleet now includes 3,400 vehicles, and there are
currently 163 sedans, wagons and utility vehicles
running on LPG autogas.
Testing of hybrid-powered vehicles, which use a
combination of electric and petrol power, has proved
beneficial, as the vehicle is cleaner and cheaper to run
than even the autogas powered vehicles. In light of this,
eight hybrid vehicles were purchased during 2004-2005.
Our fleet policies and procedures have also been
altered to encourage the increased use of four cylinder
and gas-powed vehicles.
2004-2005 target – increase the number of hybrid
vehicles to eight, LPG vehicles to 170 and reduce large
petrol vehicles by 20
Outcomes – increased the number of hybrid vehicles
to ten, LPG vehicles to 182 and reduced large petrol
vehicles by 46
Future goals – place greater emphasis on replacing six
cylinder vehicles with four cylinder vehicles, to further
reduce fuel usage and greenhouse gas emissions.
200
LPG fleet
10
Hybrid fleet
Number of vehicles
150
100
50
Number of vehicles
8
6
4
2
0
2001-2002 2002-2003 2003-2004 2004-2005 2001-2002 2002-2003 2003-2004 2004-2005
0
Years
Years
COUNTRY ENERGY ANNUAL REPORT 2004–2005

A valued part of the community
35
COUNTRY ENERGY ANNUAL REPORT 2004–2005

36
Satisfied community
Exceptionally strong results were achieved in our
community satisfaction survey of local councils,
business and community representatives. In the March
to June 2005 quarter, the overall satisfaction rating was
95 per cent, a result which has also been maintained for
the past three quarters. In all five performance aspects
– customer service, citizenship, corporate capability,
partnering and products – we scored more than 92 per
cent. The average overall score for all eight regions was
up this year, when compared to 2003-2004.
2004-2005 target – 90 per cent rating – community
satisfaction survey
Outcome – 90 per cent community satisfaction
Future goals – 90 per cent community satisfaction.
Trusted brand
As a brand Country Energy is relatively new, yet
we enjoy 100 per cent brand awareness across our
network area, with positive ‘brand associations’ around
trustworthiness, responsiveness and overall reputation.
Our positive reputation goes beyond our franchise
area, as a survey of Victorian retail customers showed
similar results. We are now recognised as a leading
brand in the electricity market, with above average
‘brand associations’. Commercial customers rate
our ‘dedicated account management’ and ‘tailored
services’ 10 per cent above the market average and our
‘commitment to rural and regional communities’
far higher than the market average.
2004-2005 target – 95 per cent brand awareness
Outcome – 100 per cent awareness
Future goals – 95 per cent awareness.
Images most associated with own primary electricity retailer
Value for money
45%
53%
Dedicated account management
42%
53%
Tailor their services to your business
37%
47%
Provides advantages for your business
37%
46%
Puts customers first
Best energy management solutions
34%
30%
38%
48%
Commitment to rural / regional communities
30%
62%
Foremost provider of dual fuel
Innovative
Green energy alternatives
Over priced
Under resourced
Difficult to deal
8%
6%
10%
11%
15%
16%
17%
24%
24%
31%
23%
28%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
% of respondents per primary retailer
Total market
Country Energy
Source: © Prepared for Country Energy by Utility Market Intelligence 2004
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Increased presence
Our program of returning services to country and
coastal areas continued this year, with the opening
of 10 new customer service and field service centres
– taking the total since forming to 33.
New centres were opened in –
• Stroud (FSC)
• West Wyalong (FSC)
• Hillston (CSC)
• Cooma (CSC)
• Batemans Bay (CSC)
• Port Macquarie (CSC)
• Leeton (CSC)
• Broken Hill (CSC)
• Walcha (FSC)
• Forster/Tuncurry (FSC).
Where possible, we adopted the cost-effective formula
of joining with one or more strategic partners, such as
local councils, water authorities, credit unions and travel
agents – offering customers a broader range of services
in one location.
Two specially-equipped recloser workshops were
also opened in Goulburn and Leeton to maintain
and refurbish protection equipment, reinforcing our
commitment to improving services, creating local jobs
and specialist resources in the south western and south
eastern regions.
Country Support
In response to the persistent drought and increasing
hardship, our customer hardship program – Country
Support – was expanded to include new support
services.
This includes Busiplan for small businesses and
Farmplan for farming families and offers account
management services more tailored to rural business
income cycles. We are also improving frontline
employees’ skills and related systems to ensure the
philosophy is inherent across the business.
By simply negotiating sensible, individualised
payment plans, Country Support continues to
reduce disconnections for non-payment as well as
associated costs. The program assisted around
2,000 new customers this financial year and reduced
disconnections for non-payment by around 60 per cent,
compared to results before the introduction of Country
Support.
Our industry leading approach focuses on
communicating with customers, help in accessing
support and concessions, affordable payment plans,
automatic payment channels (like Centrelink’s
Centrepay facility) and energy efficiency advice.
Future goals – expand Country Support to more
farming and small business customers.
37
On the road
To ensure any business decision we make best meets
the needs of all our stakeholders, our Board and
Executive regularly travelled to country and coastal
venues this year.
They attended management meetings, visited local
facilities and met with employees, local councils,
industry and community representatives to discuss
first-hand issues facing their community. This
philosophy ensures we keep ‘our finger on the pulse’
and are in touch with our customers’ needs.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

38
Resolving complaints
During the year, we received 3,833 complaints from
small retail/residential customers (domestic customers
under 160 megawatt hours), representing an 8.37 per
cent reduction from the number of complaints received
last year.
A program known as the First Contact Complaint
Completion (FCCC) program was introduced in
December 2004 to take full advantage of the extensive
experience of our frontline team in reducing complaint
resolution time and providing customers with a
consistently high level of customer service.
2004-2005 target – 90 per cent of complaints resolved
at first point of contact
Outcome – 93.2 per cent of complaints resolved
at first point of contact
Future goals – increase number of complaints
resolved at first point of contact to 94 per cent by
2008-2009.
Our fresh approach to complaints management also
saw a shift from reporting the number of complaints
received to the average time to resolve each complaint.
A greater emphasis has been placed on responding
to and completing complaints as early as possible by
frontline employees, with the aim of resolving issues
within five days.
Due in part to the introduction of a First Call Complaint
Completion (FCCC) program, we met this target for
nine of the 12 reporting periods.
2004-2005 target – reduce average time to resolve
complaints to five days
Outcome – achieved an average time to resolve
complaints of 3.7 days
Future goals – maintain average time to resolve
complaints at less than four days.
6000
Retail and network complaints
Number of complaints
5000
4000
3000
2000
1000
0
2002-2003 2003-2004 2004-2005
Retail
Network
8
Average domestic complaint resolution
Days to resolve
COUNTRY ENERGY ANNUAL REPORT 2
2004–2005
6
4

Nu
1000
0
2002-2003 2003-2004 2004-2005
Number of complaints
Days to resolve
6000
5000
4000
3000
2000
1000
8
0
6
4
2
Retail
Network
Retail and network complaints
Average domestic complaint resolution
2002-2003 2003-2004 2004-2005
Retail
Network
0
Jul-04
Aug-04
Sep-04
Oct-04
Nov-04
Dec-04
Jan-05
Feb-05
Mar-05
Apr-05
May-05
Jun-05
39
8
Actual
Target
Average domestic complaint resolution
EWON consultations
To help contacts within the ombudsman’s office better
6
The flow-on benefits of our First Call Complaint
understand our operations, a number of representatives
Completion 4 (FCCC) program is evident in the reduced
visited our central western region. The two-day
number of customers who escalated their complaint to
visit included presentations from a broad range of
the New South Wales Energy and Water Ombudsman
departments and a field trip to Blayney Wind Farm.
2
(EWON).
NSW Energy Ombudsman – Country Energy case share trend
2004-2005 target – less than eight per cent of all
30
Customer 0 consultations made by EWON decreased
complaints escalated to EWON
by more 25 than 16 per cent, from 725 last year to 610 in Outcome – target met for all four quarters
2004-2005, which is a Country Energy record. None of
these 20
Future goals – maintain record of less than eight per
progressed to dispute status.
Actual
cent Target of complaints escalating to EWON.
Only 15 7.3 per cent of all consultations dealt with by
EWON related to Country Energy, a decrease from the
previous 10 period, and well under our 25 per cent market
share.
5
Percentage of consultations
Days to resolve
Jul-04
Aug-04
Sep-04
Oct-04
Nov-04
Dec-04
Jan-05
Feb-05
Mar-05
Apr-05
May-05
Jun-05
0
2001-2002 2002-2003 2003-2004 2004-2005
NSW Energy Ombudsman – Country Energy case share trend
Actual
Trend
30
Percentage of consultations
25
20
15
10
5
0
2001-2002 2002-2003 2003-2004 2004-2005
Actual
Trend
COUNTRY ENERGY ANNUAL REPORT 2004–2005

40
Engaging stakeholders
Country Energy works closely with local, State and
national media, local government and State Members of
Parliament to encourage feedback and share information.
Regular meetings, print and electronic media articles,
advertisements, open days, taking an active role in
community groups, making presentations and presenting
awards are just some of the tools used.
We also have strong links with members of our advisory
groups to ensure we keep in touch with customer
concerns and needs. Our advisory groups include a
Customer Council, Rural Advisory Group and eight
Regional Advisory Boards.
Customer Council
Members meet quarterly to address issues within
the community and act as advocates for the diverse
spread of demographics they each represent.
During the year, three new members joined the council.
They were Jan Hudson, Ann Weldon and
John Gordon.
Their combined strengths and synergies saw positive
input in initiatives such as the format of new customer
accounts, redesign of a ‘How to pay your energy bill’
brochure and involvement in a green power seminar
in conjunction with Dubbo Chamber of Commerce.
Customer council members and the groups
they represent –
John Gordon
Robyn Rooth
Jan Hudson
Sandy McMaster
Ann Weldon
Dianne Decker
Industrial/commercial customers
Low income households
General consumer groups
Customers living in rural/remote areas
Aboriginal and Torres Strait Islanders
People with disabilities
Rural Advisory Group
Central to our community consultation philosophy, the
Rural Advisory Group (RAG) acts as a vehicle to give
rural and remote customers a voice. There is no formal
legislative requirement to have this forum – we chose to
create this unique group to gather feedback and identify
issues affecting country people.
Members meet quarterly at different locations,
visiting various facilities, openings and functions.
At the end of 2004, two members were special guests
at a two-day employee development workshop in
Coonabarabran to give them a better understanding
of our objectives and values.
Rural Advisory Group members and the groups
they represent –
John Bestwick Rural producers
Steve Burgess Ricegrowers’ Association
of Australia
Murray Fedderson Rural businesses
David Hughes Rural producers
Pat le Lievre Remote rural customers
Chris Crockett Rural producers
Joyce Pascoe Country Women’s Association
Phillip Woodward Rural producers
Regional Advisory Boards
Established to represent the unique customer interests
in each of our eight regions, the Regional Advisory
Boards (RABs) are convened by regional management
teams and meet quarterly to receive briefings on our
range of products, activities and network improvements.
Meetings often include site visits and tours of facilities.
Members are from a variety of backgrounds, from local
government, chambers of commerce and the media to
minority and community groups.
Future goals – expand our community consultation
philosophy to the Far West region following the merger.
Helping communities thrive
Our community sponsorship program reflects Country
Energy’s position as a responsible corporate citizen and
gives the 1,500 communities we serve the support they
need to grow. With more than 3,300 employees living
and working in the communities we serve, this gives us
a vested interest in seeing them thrive.
In 2004-2005, we invested more than $1.7 million on
over 1,000 environmental, social, sporting, educational,
business, research, arts and cultural partnerships,
donations and in-kind support initiatives. We plan to
spend a similar amount in 2005-2006.
For many years, our employees have raised additional
funds for charities and local community groups such as
Camp Quality, Ronald McDonald House and the Cancer
Council, by donating their time and wages or hosting
fundraisers. We also mounted a Country Energy tsunami
appeal in January 2005, which raised a total of $20,684
for Oxfam Community Aid Abroad’s Earthquake Tsunami
Emergency Appeal.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Sponsorship spend
$82,424
$125,000
$84,094
$23,585
Arts
Cause Related
Community
$20,088
Education
$501
Entertainment
$1,600
Environment
$12,197
$7,400
$3,469
$24,950
$90,571
$500,554
Expos
Field Days
Home Shows
Indigenous
Other
Sports
Not detailed
41
Note: Does not include donations or in-kind support
The overall community sponsorship program
compliments our dedication to integrating regional
development into all of our daily operations and
management processes. Sponsorship is just one way
that Country Energy contributes to development skills
and resources in country and coastal New South Wales.
Examples of our range of sponsorships and their
community benefits include –
• $35,000 Country Energy Art Prize for Landscape
Painting – acclaimed as Australia’s richest annual
landscape competition and culminating in an
exhibition at Sydney Opera House in November 2004.
The prize supports regional art galleries and raises
the profile of regional artists who are often isolated
from city galleries, buyers, contacts and networks
• Regional tours of the Sydney Opera House’s Babies
Proms – delivering an otherwise out of reach
experience to thousands of country and coastal
kids over the past two years
• Bush poetry competition, Tamworth’s Country Music
Festival – the most prestigious event of its kind in
Australia, attracting more than 700 aspiring poets and
writers
• Mudgee Small Farm Field Days, Pro-Ag, PRIMEX,
Murrumbidgee Farm Fair, AgQuip Field Day, Henty
Machinery Field Days – showcasing local businesses
and the latest products and services for the rural
community. An ideal forum to promote Country
Energy products and energy efficiency, vegetation
management and public safety messages
• Property Planning Competition with Namoi and
Border Rivers/Gwydir Catchment Management
Authorities – giving local agriculture students the
opportunity to learn about and influence sustainable
farm resource management
• Country Energy Adventure Trek – a fundraiser car rally
through regional New South Wales to raise money for
Starlight Children’s Foundation
• Patchs Beach Dune Care – donation of a lawn mower
to help volunteers maintain the beach area and stop
regrowth of unwanted weeds
• Lifeline Central West – funded seminars on
adolescent issues and conflict resolution, family
and relationship issues, child protection, youth
grieving through the loss of a loved one and suicide
prevention and intervention
• Dubbo City Chamber of Commerce’s Rhino
Outstanding Business Awards – recognising
business excellence, providing inspiration and
setting benchmarks for best practice
COUNTRY ENERGY ANNUAL REPORT 2004–2005

42
• Deniliquin Ute Muster – attracting nearly 20,000
tourists to the area and assisting local economic
development
• Keep Australia Beautiful – Country Energy Beach
Spirit Awards and Country Energy Bush Spirit
Awards, catagories within the well known Tidy
Towns and Clean Beach Challenge Programs. These
awards recognise community groups and volunteers
committed to building a sustainable future for their
region
• Sawtell Chilli Festival – hosted Country Energy Cook-
Off between teams of high school students and
raised money for local Rural Fire Service through
donations for taste testing
• Country Energy Queanbeyan Gift – recognised as
one of the most prestigious foot races on the eastern
seaboard
• Country Energy Water Safety Program – joined forces
with Surf Life Saving New South Wales to deliver
a water safety education program to approximately
5,000 children between seven and 14 years in the
lead-up to the 2004 summer school holidays.
• Country Support hardship assistance program
• Sponsorship of groups and events addressing and
celebrating cultural diversity. One example is the
Cowra Festival of International Understanding, an
annual event where a guest nation is invited to
showcase their traditions and culture, giving the
community a chance to experience different cultures
• Unique customer advisory groups.
Future goals – introduce additional initiatives in 2005-
2006, including presentations on cultural diversity to
the Customer Council and Rural Advisory Group.
Ethnic affairs
During 2004-2005, we continued to develop and
implement initiatives to meet the needs of our diverse
customer base and promote the principles embedded
in our Ethnic Affairs Priority Statement for 2004-2008.
Initiatives included –
• Cultural Awareness Program, which encourages
acceptance of other cultures in the workforce and in
the community
• Awareness, Equal Employment Opportunity and
Diversity Policy, which underpins our employment
practices
• Interpreter services for Arabic, Chinese, Vietnamese,
Italian, Greek and Spanish for customers calling
13 14 50
COUNTRY ENERGY ANNUAL REPORT 2004–2005

An employer of choice
43
COUNTRY ENERGY ANNUAL REPORT 2004–2005

44
We appreciate that our people will differentiate us from
our competitors. Employees are our most significant
asset and we continue to invest in them because
employee development is a key driver in meeting our
goals – as an employer of choice and Australia’s leading
utility business.
Celebrating gold
Our groundbreaking Indigenous Employment Program
was recognised with a gold medal in the New South
Wales Premier’s Public Sector Awards in November
2004.
Thirty nine indigenous apprentices and trainees
currently work across the State. Of the 58 apprentices
employed in 2005, eight were indigenous Australians.
Four indigenous trainees are also completing a
Certificate II in Powerline Distribution during 2005.
The award-winning program focuses on providing
equal access and representation from the indigenous
community, partnering with indigenous recruitment
services, pre-employment training and mentoring,
using indigenous trainers, assessors and support
teams, face-to-face training methods and working
with contacts within indigenous communities.
Future goals – ensure a minimum of 10 per cent
of new apprentices are indigenous. Host a series of
indigenous awareness seminars during 2005-2006 to
help employees learn more about indigenous culture,
working with indigenous workmates and customers
and the importance of our Indigenous Employment
Program.
Jobs growth
Our apprentice program is tangible proof that Country
Energy is serious about improving jobs growth and
career opportunities. Employing new apprentices,
trainees and employees is part of our long-term plan
to renew our ageing workforce, strengthen field crews
and improve service levels across the State. The
program complements our five-year, $1.2 billion network
program, which will cement improvements to reliability
and overall service delivery and is helping to retain
locally-based, qualified skills to meet the needs of our
customers well into the future.
In February 2005, we reinforced our reputation as one
of regional New South Wales’ largest employers of
apprentices by recruiting 58 apprentice lineworkers
and electrical technicians.
The new influx included two women and eight
indigenous apprentices, who are now based at 44
different locations. More than 2,000 applications were
received, with interest from as far afield as Adelaide,
Brisbane, Darwin and New Zealand.
Currently, we have 98 first year apprentices, 81 second
year apprentices, 90 third year apprentices and 72
fourth year apprentices, including four females. These
include cable joiners, lineworkers, gas fitters, electrical
technicians, fitter machinists and communications
specialists. The average age of apprentices is 25 years.
To ensure apprentices emerge well-rounded,
their training involves regular classroom and field
performance assessments, training camps and
experience in all aspects of service delivery.
It has become common for apprentices to work so
industriously that they complete their apprenticeships
early and are offered a permanent position.
Over the past four years, we have maintained an
average apprentice retention rate of more than 80
per cent. Of the 35 apprentices who completed their
training in 2004-2005, 30 were employed full-time by
Country Energy.
75 new recruits
During the reporting period, we began the search for 75
would-be electrical and water apprentices and trainees
– the highest intake for Country Energy in three years.
The fresh intake in early 2006 will push the number of
new apprentices created by Country Energy to more
than 350.
The highly sought after apprenticeships are being
offered in 56 communities across the State, from
Wentworth and Moama in the south, west to Broken
Hill and north to Tweed Heads. Of the 72 new
apprenticeships, 58 are for powerline workers, 11
for electrical technicians, two for underground cable
joiners and one for a communications specialist.
Three water industry trainees will be based in Broken
Hill and Menindee.
We will also continue to promote indigenous
employment through our award-winning Indigenous
Employment Program, which saw 11 indigenous
apprentices join the company in 2005 and eight in
2004. Similar numbers are expected in 2006.
Future goals – Recruit 75 new electrical and
water apprentices and trainees in 2006, including
approximately 10 per cent indigenous apprentices.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Apprentices by region / operational area 2002-2005
Networks
Communications
South Eastern
South Western
Riverina
Central Western
Northern
North Western
Mid North Coast
Far North Coast
6,215 years of service
Not many companies can claim their business is based
on thousands of years of service, however, 293 longstanding
employees recently celebrated a collective
6,215 years of service – the equivalent of 1.6 million
working days.
Our annual Service Milestone Awards are indicative
that Country Energy is an employer of choice, as more
than 40 per cent of employees have between 10 and 45
years of service.
This year we recognised 91 employees who have
served more than 30 years, while 202 other employees
– from lineworkers and customer service advisers to
senior managers and executives – reached 10 to 30-year
milestones. This included 19 individuals who have had
more than 40 years on the job.
Best employer survey
Our employee engagement score continued to rise
following our participation in the 2005 Hewitt Best
Employer in Australia and New Zealand survey, which
measures how passionate our people are about
working for Country Energy.
Our overall engagement score was 66 per cent, which
is a nine per cent increase from last year and places
Country Energy in the high performance zone.
While we were below the best employer’s average of
77 per cent, Country Energy is above the average for
other organisations, which is 52 per cent. Our rating of
66 per cent has improved from 57 per cent in 2004 and
54 per cent in 2003.
The widely recognised study measures the percentage
of employees that are passionate about working for
their company and is gauged by whether an employee
is willing to ‘say’, ‘stay’ and ‘strive’ for an organisation.
Survey results highlighted the opportunity to work
on brand alignment (‘walking the talk’), recognition,
policies, customer focus and senior leadership. The
study has proven useful in providing sound feedback
from our people on key factors that effect employee
engagement, and ultimately business performance.
Future goals – conduct a similar survey in 2005-2006,
aiming for a score of 77 per cent engagement.
45
Employee engagement
40%
Other organisations average 2004
(52%)
60%
Country Energy
(66%)
25%
Serious
Zone
Destructive
Zone
Indifferent
Zone
High
Performance
Zone
0%
100%
COUNTRY ENERGY ANNUAL REPORT 2004–2005

46
Organisational health
Taking the time to look at Country Energy through
the eyes of employees has provided valuable insight
into the direction we are heading. Our third employee
survey, which was completed in December, revealed
that our organisational health has improved from 2.93
to 2.96 (out of four), with more than 40 per cent of
business units bettering their ‘health’ score.
Comments were far more positive, with the most
notable improvements being in the leadership,
training and development areas. Safety, customer
service, team culture and teamwork continued to
be the highest scoring areas, while opportunities for
improvements relate to resourcing, local leadership and
communication between business units.
The survey covers areas such as: skills development;
safety; freedom from harassment and discrimination;
environmental responsibility; change management;
internal recruitment processes; exposure to senior
executives; consistency of team leadership; and the
level of positive feedback.
Future goals – maintain momentum of divisional focus
groups to implement local action plans addressing
identified issues, and reach closer to the ‘best result’
survey benchmark of 3.4.
Investing in our people
As part of our culture change program known as
Powerful Staff, all employees were invited to participate
in a two-day leadership development workshop during
2004. Eighty four per cent of employees took part in
the program, which has now progressed to stage two
– developing rewards and recognition guidelines.
One of the best ways to gauge Powerful Staff’s success
is employee feedback. Bulahdelah technical officer
Steve Howell encapsulated the majority of comments
when he described the initiative as one of the “biggest
steps forward for Country Energy”. “I feel that the
program has finally created one organisation, breaking
down the barriers of the three former distributors
and proving that there is strength in unity. It also
showed that it’s the little extras that make the ordinary
extraordinary.”
During the workshops at Coonabarabran, in north
western New South Wales, employees designed a
range of posters that reflected the messages and
experiences they took away. These posters have now
been professionally designed and printed to remind us
what it means to be ‘Powerful Staff’.
Our investment in Powerful Staff also benefited the
Coonabarabran community, as all produce was sourced
locally and the venue owners employed two hospitality
trainees as a direct result.
Posters designd by emplyees - What it means to be ‘Powerful Staff’
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Employees also initiated a fundraiser for the
Coonabarabran Volunteer Rescue Association.
Raffle ticket sales and fundraising challenges reached
an incredible $40,000. Country Energy matched the
amount dollar-for-dollar and the additional $40,000 will
be distributed to country and coastal community groups
and charities during the next 12 months.
Powerful Staff is an extension of the high performance
culture training undertaken by more than 400
employees two years ago. Regular performance
coaching is now an important management tool across
the business, helping to improve performance and
develop leadership skills.
Future goals – develop Country Energy’s first rewards
and recognition guidelines to complement the Service
Milestone Awards and Managing Director’s Awards.
Powerful tools
A range of communication and management tools are
now in place to help us become an employer of choice.
Employees are more empowered than ever because
they have the right tools and resources, are kept
safe and informed and have a greater say in Country
Energy’s future.
Powerful tools include –
• Monthly Team Briefs, followed by team meetings
• Weekly and monthly newsletters
• A comprehensive intranet service, Countrynet
• A corporate dashboard, which drives and tracks
outcomes, encourages group involvement and helps
the whole organisation appreciate our progress
• Regular performance coaching
• Succession planning
• Powerful Staff cultural change program, soon to
include the establishment of rewards and recognition
guidelines
• High performance culture initiative, which
incorporates a team leader and senior management
development program
Country Energy workforce by sex
Male
79%
Female
21%
Career development
Our Frontline Management Program has become
particularly popular, with 266 employees currently
studying for their frontline management certificate,
compared to 120 participants in the last reporting
period. The program has two levels – certificate and
diploma, which 90 employees are studying for in 2005.
A significant component of the diploma is a workplace
project requiring participants to identify research and
recommend a solution to a real business improvement
opportunity.
Other training and development programs to help
employees boost their career prospects include
specialist courses such as Customer Service Programs,
a Graduate Diploma Program through Charles Sturt
University, and a variety of tertiary qualification
programs through our Career Development Assistance
Program. Studies range from diplomas through to
degrees and masters, across disciplines such as
engineering, information technology, marketing,
horticulture and law.
This year, we also introduced a comprehensive
professional electrical engineering and technical officer
recruitment and training program. This includes a
professional engineering program for both graduates
and cadets and a technical officer cadetship program
(both diploma and advanced diploma), which will cover
new industry qualifications.
47
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Competency based classification
The implementation of an organisation-wide
competency based classification structure is well
underway, with the stores, substation design and meter
services divisions currently involved in pilot programs.
Country Energy workforce by
employment status
Casual 1% Part time 6%
48
The programs will take approximately three months to
complete. When they are evaluated, Country Energy
will be in a position to commence the roll-out across all
business areas, starting with the customer service and
information systems divisions.
The initiative has received broad union approval and
union representatives have been contacted to be
involved in a consultative group to review the program’s
progress.
As well as meeting due diligence requirements,
the initiative is designed to ensure employees are
appropriately trained and qualified to meet the current
and future requirements of their roles.
Future goals – complete roll-out by June 2007.
Powerful future
To become an employer of choice, we need to develop
a highly skilled workforce. This means providing
managers with a framework for making staffing and
development decisions based on our vision, strategic
plan, budgetary resources and a set of desired
workforce competencies for addressing present
and anticipated needs for the next five to 10 years.
Our new workforce planning initiative – known as
Powerful Future – aims to get the right number of
people, with the right set of competencies, in the right
jobs, at the right time. Essentially, it highlights the
“people factor” in achieving our goals.
Full time 93%
Considering that we have an ageing workforce,
with 43.7 per cent of employees over 45 years old,
workforce planning is vital. It will also help overcome
potential issues such as the loss of skills and
knowledge, employee retention in a highly competitive
market, the current lack of succession planning and
shortage of employees willing to work in remote
locations.
Longer term, resource and research planning indicates
an increase in powerline workers and decline in
electrical tradespeople. To prepare for this, we have
created dual qualified positions within the enterprise
award. More people with dual qualifications will provide
greater flexibility to combat the expected industry skills
shortage.
Future goals – Develop a current workforce profile
by October 2005 to help identify gaps and develop
workforce plans integrating retention and attraction
strategies. Plans will then be monitored and updated
on a yearly basis.
Number of employees
1200
1000
800
600
400
200
Employee age distribution
0
15-24yrs 25-34yrs 35-44yrs 45-54yrs 55-64yrs 65+yrs
Age
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Employee assistance program
Country Energy offers a free, independent and
professional counselling and support service to all
employees and their immediate families.
The Employee Assistance Program provides assistance
in resolving work related and personal problems, which
may impact on employees’ quality of life and their
safety and work performance through face-to-face or
telephone counselling. Participation is voluntary and
confidentiality is assured.
Turnover rate
During the year, our employee turnover rate was 5.34
per cent, which is in line with previous years and only
slightly above our target of four per cent, which is
considered industry best practice.
49
Future goals – Four per cent turnover rate.
Industrial relations
Country Energy’s Award for 2005-2007 was
negotiated with the unions in less than two months,
with a number of business units contributing to the
discussions. The new award is expected to be ratified
in August, registered by October and increases paid in
November 2005.
Other than general wage increases, the award
includes major improvements to maternity leave
and other conditions of service, as well as more
efficient outsourcing arrangements. It will contribute
to enhanced conditions and improved business
efficiencies and help to achieve our goal of becoming
an employer of choice.
Our record of no lost time due to industrial disputes
was maintained this year.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Our Board
50
Barbara Ward
BEc., MPol. Econ
Chairman since 6 June 2001
Member of Audit and Risk Committee
Chairman, EMMLINK Pty Limited
Chairman, Country Energy Gas Pty Limited
Craig Murray
Managing director since 8 June 2001
Member of Safety and Environment Committee
Director, EMMLINK Pty Limited
Director, Country Energy Gas Pty Limited
The Hon Michael Lee
BSc., BE (Hons), FIE Aust.
Director since 1 March 2002
Member of Safety and Environment Committee
Greg McLean
Director since 30 April 2002
Member of Safety and Environment Committee
Tim Sullivan OAM
Director since 6 June 2001
Chairman of Safety and Environment Committee
Rowena Sylvester
B. Bus
Director since 1 March 2002
Chairman of Audit and Risk Committee
John Wearne AM
Director since 6 June 2001
Member of Audit and Risk Committee
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Our Executive
Craig Murray – Managing Director
• Member of the Board of Directors
• Leadership, strategy, business performance,
corporate values, shareholder and stakeholder
relations
John Adams – Group General Manager Retail
Dip. (Elect Eng), B Bus., FIE Aust.
• Retail business management, including sales and
marketing, national and residential sales, retail pricing
and product development
51
Terri Benson – Group General Manager
Regulatory Affairs
B Bus., CPA
• Organisational development, regulatory strategy,
regulated pricing, wholesale market regulation and
licence compliance, management of gas networks,
safety, environment and quality divisions
Ron Craggs – Group General Manager Corporate
Services and Company Secretary
BE (Hons), Grad. Dip. Mgt.
• Corporate governance and services to the Board
Justin De Lorenzo – Group General Manager
Finance and Business Development
B Com, ACA, ASIA.
• Finance, credit control, energy trading, financial
management and accounting, risk management and
insurance, business development and treasury
Bill Frewen – Group General Manager External
Relations
BA LLB
• Corporate affairs, media and communications,
customer and government relations, legal services,
regional development, renewables and environmental
development
Gary Humphreys – Group General Manager
Corporate Operations
• Corporate marketing, strategy and planning, property
and fleet management, security, customer services,
call centres, billing, corporate support services and
supply chain management
Terry Miller – Group General Manager Service
Delivery
BE, MBA, CP Eng, MIE Aust., FAICD
• Core service delivery functions including regional field
work and safety management
Ken Stonestreet – Group General Manager
Networks and Infrastructure
BE (Hons), CP Eng
• Commercial and operational performance of power
supply network, network asset management
strategy and policy, sub-transmission system design,
development and construction, logistics, specialised
technical services, system operations and network
control and information technology services
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Corporate governance
52
Establishment
Country Energy is a statutory State Owned Corporation
(SOC) under the State Owned Corporations Act 1989,
established by the Energy Services Corporations
Act 1995. Under this Act, the principal objectives of
Country Energy are:
(a) to be a successful business and, to this end:
(i) operate at least as efficiently as any comparable
businesses,
(ii) maximise the net worth of the State’s investment
in it,
(iii) exhibit a sense of social responsibility by having
regard to the interests of the community in which
it operates,
(b) to protect the environment by conducting its
operations in compliance with the principles of
ecologically sustainable development contained in
section 6 (2) of the Protection of the Environment
Administration Act 1991,
(c) to exhibit a sense of responsibility towards regional
development and decentralisation in the way in
which it operates,
(d) to operate efficient, safe and reliable facilities for the
distribution of electricity and other forms of energy,
(e) to be an efficient and responsible supplier of
electricity and other forms of energy and of services
relating to the use and conservation of electricity
and other forms of energy,
(f) to be a successful participant in the wholesale
and retail markets for electricity and other forms
of energy and for services relating to the use and
conservation of electricity and other forms of energy.
A statutory SOC is declared to be an excluded matter
for the purposes of section 5F of the Corporations Act
2001 (Commonwealth) in relation to the whole of the
Corporation’s Law other than certain provisions relating
to financial products, or as may be otherwise declared,
in the Regulations under the State Owned Corporations
Act 1989.
Shareholders
In accordance with the provisions of the State Owned
Corporations Act 1989 and the Energy Services
Corporations Act 1995, Country Energy has two
shareholders each holding one share of $1. The
shareholders in 2004-2005 were the Treasurer of New
South Wales and the New South Wales Treasurer
Special Minister of State. Shares in an energy services
corporation may not be sold or otherwise disposed of,
except to eligible ministers.
Constitution
Country Energy’s constitution comprises a
Memorandum and Articles of Association which
address areas normally covered within a Corporations
Law company, including the administration of shares,
general meetings, directors, chief executive officer,
remuneration, meeting and administrative procedures,
company secretary, dividends and indemnities of
directors and officers.
Country Energy Board
The Energy Services Corporations Act 1995 provides
that the Board consists of –
• the chief executive officer, and
• one director, to be appointed by the voting
shareholders on the recommendation of a selection
commity nominated by the portfolio minister and the
Labor Council of New South Wales, and
• at least two and not more than five other directors
to be appointed by the voting shareholders at their
discretion.
One of the directors referred to in the last point is
appointed by the voting shareholders as chairperson
of the Board.
The voting shareholders have appointed five
independent non-executive directors for fixed period,
renewable terms, as shown in the following table.
The Board is accountable to the voting shareholders
in the manner set out in Part 4 of the State Owned
Corporations Act 1989 and in Country Energy’s
Constitution.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Director Current appointment Board Audit and risk
committee
Barbara Ward
Craig Murray
The Hon Michael
Lee
Greg McLean
Tim Sullivan OAM
Rowena Sylvester
John Wearne AM
1 March 2003 to
28 February 2006
Concurrent with
appointment as
Managing Director
1 March 2005 to
28 February 2007
1 May 2005 to
30 April 2006
1 March 2003 to
28 February 2006
1 March 2005 to
28 February 2007
1 March 2005 to
28 February 2006
Non executive,
Chairman
Executive, Managing
Director
Non executive
Non executive,
Unions NSW nominee
Non executive
Non executive
Non executive
Member
Chairman
Member
Safety and
environment
committee
Member
Member
Member
Chairman
53
Directors’ interests
Directors are required to disclose any material contract
or relationship with Country Energy and to disclose all
companies or other organisations with which they are
professionally involved. Details of directors’ interests
are maintained by the company secretary in a register
which is included in the agenda of every Board
meeting. The constitution provides for procedures to be
followed in the event of a conflict or a perceived conflict
arising between a director’s interest and a matter
before the Board.
Board performance review
Country Energy’s Board conducts periodic reviews
of its performance by means of an internal survey.
These reviews seek to identify where improvements
can be made and assess the quality, timeliness and
effectiveness of information made available to directors.
Non-management meetings
The non-executive directors meet at least once a
year without management in a forum intended to
allow for open discussion on Board and management
performance. This is in addition to the consideration of
the performance and remuneration of the managing
director, which is conducted by the Board in the
absence of the managing director.
Directors’ remuneration
Directors’ remuneration is determined by the New
South Wales Government and is currently in the form
of a cash stipend without ‘at risk’ elements or non-cash
emoluments.
Country Energy makes payments to the directors in
accordance with these directions under the framework
of the organisation’s normal payroll system. Out of
pocket expenses related to attendance at meetings
are reimbursed.
Indemnities
Under the State Owned Corporations Act, state owned
corporations are able to indemnify their directors and
officers against certain liabilities incurred in the course
of their employment. The indemnity cannot be used
without the approval of the voting shareholders.
Currently, all Country Energy non-executive directors,
the managing director and other offices fiting the critera
detailed in the Treasury Policy (TPP03-6), have been
issued with a Deed of Indemnity in the form approved
by shareholders.
The Deed of Indemnity provides cover against the
following types of liability –
• Civil liability, but only if such liability is, or was,
incurred by the indemnified party in his or her
capacity as an officer acting in good faith
• Costs and expenses incurred by the indemnified
party in defending proceedings, whether civil or
criminal, in which judgement is, or was, given in
favour of the indemnified party, or in which the
indemnified party was acquitted
• Costs and expenses in connection with any
application in relation to a proceeding in which a court
grants or granted relief to the indemnified party.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

54
Country Energy also purchases insurance cover
for directors’ and officers’ liability and professional
indemnity.
Board committees
The Board has two formally constituted committees
to assist in decision making, oversight and control,
resulting in recommendations to the Board. The
committees have delegated authority as specified
in their respective Terms of Reference.
Audit and risk committee
This committee is required to advise and report to the
Board in relation to –
• Risk management policy and strategy
• Wholesale energy trading policy and strategy
• Debt management policy and strategy
• Licence and legal compliance policy and strategy and
may exercise the Board’s authority in relation to –
• Determining, implementing and reviewing internal
audit procedures including the selection and
appointment of the assurance service agency
• Determining, implementing, and reviewing the
audit plan
• Wholesale energy trading and retail supply contract
decisions within the limits specified by the Board
• The procurement of independent professional
advice as required for the proper fulfilment of the
committee’s duties
• The procurement of information relating to the
operations or financial situation of the company
• Inquiries into any matter where issues of integrity
appear to arise.
The Board has engaged KPMG to provide management
assurance (internal audit) services. The external auditor
is the New South Wales Audit Office. Officers from
both the internal and external auditors are invited to
attend every meeting of the committee.
The committee meets annually with auditors (internal
and external) in the absence of management to discuss
any issues of concern. Should any issue require formal
reporting, the chairman advises the company secretary
accordingly. No such reports have been made this year.
Safety and environment committee
The Terms of Reference for the Safety and Environment
Committee require that the committee comprise at
least three non-executive directors and the managing
director. Other directors have a standing invitation to
attend all meetings. Management representatives may
be required to attend meetings at the request of the
committee.
The committee is required to advise and report to the
Board on policy, strategy, initiatives and achievements,
in relation to –
• The safety of employees, the public, contractors and
accredited service providers in any area of relevance
to Country Energy’s activities, where reasonably
under the control of Country Energy
• The impact of Country Energy’s activities on the
environment and the achievement of ecologically
sustainable development
• Any other matter considered by the committee to be
of relevance to their objectives and may exercise the
Board’s authority in relation to –
• Monitoring and directing the health, safety and
environmental performance of the organisation
• Compiling, reviewing and submitting reports relating
to health, safety and environment matters to external
bodies as required
• The procurement of independent professional
advice as required for the proper fulfillment of the
committee’s duties
• The procurement of information relating to safety
and environmental aspects of the operations of the
company
• Other matters referred by the Board to the
committee.
The committee meets regularly with management
and receives detailed reports on all significant safety
and environmental incidents and the actions taken to
address any areas of concern.
In response to the Board’s strategy of placing safety as
a top priority, the committee has sought detailed advice
on safety management and performance. As a result,
a comprehensive restructure of the safety business
unit has occurred and new safety initiatives are being
implemented.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Risk management
Country Energy appreciates that appropriate risk
assessment and accountability hinges on a strong
and effective corporate governance framework.
Risk management is a key focus area for the Board
and its non-executive audit and risk committee.
To this end, we have an organisation-wide risk
management framework, backed by specialised
software which assists in managing risk at the strategic
and operations levels. Risk management is integrated
into the company from a divisional level and supported
by divisional risk coordinators.
During the year, our executive conducted an annual
review of strategic risks to ensure the business has
appropriate risk mitigation strategies in place. This year
saw the identification and inclusion of water related
risks, following the merger with Australian Inland.
The review led to the development of a key
performance indicator (KPI) to assist in reducing our
exposure to key risks. The KPI will be reported to the
Board from July 2005. The concept revolves around
individual risk plans developed in conjunction with
10 key business risks. The objective of each plan is
to reduce risk exposure over time, by implementing
agreed mitigation strategies.
Internal audit
The internal audit plan for the reporting period was
developed in association with the annual executive risk
review and areas of known business risk. This included
an ongoing emphasis on energy trading, security and
safety along with post-implementation reviews of
major change involving information and management
systems.
Country Energy also participated in the New South
Wales Audit Office’s fraud control, self assessment
process and following on from this, we are now
formulating an umbrella fraud policy and management
strategy. The significance of this initiative was
highlighted during an internal audit report involving the
purchasing and payments’ cycle. A strategy for fraud
minimisation will form a key risk focus during
2005-2006.
Insurance against risk
Country Energy participates in an industry scheme
for public and product’s liability and director’s and
officer’s insurance. Co-members of the scheme are
Energy Australia and Integral Energy. Aon Risk Services
Australia Ltd act as broker for these industry policies.
On an individual basis, we have separate insurance
policies covering industrial special risk, motor vehicle
comprehensive, motor vehicle CTP, fidelity guarantee,
marine hull, contract works, marine transit and personal
accident/travel. Marsh Pty Ltd act as brokers for these
policies.
We also are part of the statutory schemes for Workers
Compensation in New South Wales, Victoria and
Queensland.
During the latter part of the reporting period we worked
with our brokers to integrate Australian Inland policies.
The overall “softening” of the insurance market
permitted an opportunity to negotiate some favourable
insurance premiums.
Delegations to management
A comprehensive set of delegations has been issued
to the managing director, including the power to
sub-delegate, to allow management to conduct the
business of the corporation. Notwithstanding these
delegations, specific rules have been put in place in
critical areas such as energy trading, retail sales and
environmental determinations to ensure the Board
is directly involved in decisions above predetermined
thresholds.
Directors’ attendance at meetings
Board meetings
Committee
meetings
Eligible Attended Eligible Attended
Barbara Ward 11 11 4 4
Craig Murray 11 11 5 5
The Hon Michael
Lee
11 11 5 5
Greg McLean 11 10 5 4
Tim Sullivan OAM 11 11 5 5
Rowena Sylvester 11 11 4 4
John Wearne AM 11 10 4 4
55
COUNTRY ENERGY ANNUAL REPORT 2004–2005

56
Ethical standards
Our Board has adopted policies addressing the
Country Energy Code of Conduct, conflicts of interest,
gifts, protected disclosures, privacy and other ethical
standards. These policies apply equally to the Board,
management, employees and contractors.
Code of conduct
No changes were made this year to the Code of
Conduct, which was introduced in December 2002.
The code applies to all of our directors as well as
management, employees, consultants and contractors
who represent or undertake duties for the company.
During the next 12 months, the code will be reviewed
to incorporate a Code of Ethics and ensure it is more
relevant to all employees.
Freedom of information
During the year, 14 applications were received under
the Freedom of Information Act 1989.
Number of applications received 14
Applications granted in full 9
Applications partially granted 1
Applications denied 4
No major issues arose in relation to our annual reporting
compliance under the Act.
Fair and unbiased recruitment
A fair and unbiased recruitment and selection process
is at the forefront of our employment program.
To ensure employees have the opportunity to advance
their careers, positions are advertised internally through
our regular recruitment bulletin. External recruitment is
undertaken if we are unable to attract suitably qualified
internal applicants or require new skills.
Licence compliance
Licence compliance annual reports for our gas,
electricity retail and distributor licences and safety
performance were submitted to the Department of
Energy, Utilities and Sustainability and the Independent
Pricing and Regulatory Tribunal.
As a contestable retailer in South Australia, Victoria and
Queensland, compliance reports were also submitted
to the energy regulator in each of these states, in
accordance with current guidelines.
Property disposal
Six items of property were disposed of this year, with
a combined value of $333,726. All were considered
surplus to our operations and the proceeds were used
to fund capital works projects. Access to documents
relating to the disposal of land can be obtained under
the Freedom of Information Act.
Controlled entities
EMMLINK Pty Limited (ACN 085 123 468)
A wholly-owned subsidiary of Country Energy
established in 1998 to undertake the Directlink project,
a 50/50 joint venture between EMMLINK Pty Limited
and Hydro Quebec International Australia. Directlink is a
major transmission project between Mullumbimby and
Terranora in north eastern New South Wales, forming
an entrepreneurial interstate interconnector within the
national electricity market.
Country Energy Gas Pty Limited (formerly Great
Southern Energy Gas Networks Pty Limited) (ACN
083 199 839)
A wholly-owned subsidiary of Country Energy
established in 1997 by Great Southern Energy
to distribute and retail gas in Wagga Wagga and
surrounding areas.
NorthPower Energy Services Pty Limited
(ACN 075 619 895)
A wholly-owned non-operating subsidiary of Country
Energy.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Executive remuneration
At the end of 2004-2005, Country Energy employed
51 executive officers with total remuneration packages
equal to or exceeding the New South Wales Senior
Executive Service Level 1, including five females.
The following 12 executive officers received a total
remuneration package equal to or exceeding New
South Wales Senior Executive Service Level 5 –
• Managing Director, Craig Murray $495,000
• Group General Manager Network Management,
Ken Stonestreet $311,000
• Group General Manager Finance and Business
Development, Justin De Lorenzo $303,000
• Group General Manager Retail, John Adams
$292,000
• Group General Manager Service Delivery, Terry Miller
$289,000
• Company Secretary, Ron Craggs $268,000
• Group General Manager Corporate Services,
Terri Benson $259,000
• Group General Manager Corporate Operations,
Gary Humphreys $254,000
• Group General Manager External Relations,
Bill Frewen $248,000
• General Manager Network Services, Paul Brazier
$218,000
• General Manager Network Strategy, Col Ussher
$200,000
• General Manager Information Services, Patrick
Cooper $200,000.
All executives are subject to formal annual performance
assessments based on clear accountabilities
contained in written performance agreements. All of
the executives listed above met or exceeded their
performance criteria in 2004-2005.
Country Energy’s executive remuneration policy
excludes bonus and ‘at risk’ payments. No bonus
payments were paid to any employee in relation to
this reporting year.
Equal opportunities
Our commitment to creating an organisation that
reflects the cultural and gender diversity of our
customer base is formalised in our Equal Employment
Opportunity (EEO) Plan, which also incorporates
people with a disability and our Ethnic Affairs Priority
Statement for 2004-2008.
The following table shows the equal employment
groups represented in the company at the end of
2004-2005.
57
Trends in representation of Equal Employment Opportunity (EEO) groups
EEO Group
Percentage of total workforce
Benchmark
or target
2002 2003 2004 2005
Women 50% 18% 21% 21% 21%
Aboriginal and Torres Strait Islanders 2% 1.4% 2.7% 1.2% 3.4%
People whose first language is not English 20% 1% 1% 0% 1%
People with a disability 12% 4% 5% 5% 8%
People with a disability requiring work-related
adjustment
7% 0.6% 0.5% 1.3% 2.5%
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Trends in the distribution of Equal Employment Opportunity (EEO) groups
EEO Group
Distribution Index
Benchmark
or Target
2002 2003 2004 2005
Women 100 84 80 73 75
Aboriginal and Torres Strait Islanders 100 88 61 72 67
People whose first language is not English 100 94 100 n/a n/a
People with a disability 100 104 106 107 107
People with a disability requiring work-related
adjustment
100 n/a n/a 104 103
58
Notes:
1. Staff numbers are as at 30 June 2005.
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 employees. Values less than 100 mean that the EEO group tends to be more concentrated at
lower salary levels than is the case for other employees. The more pronounced this tendency is, the lower the index will
be. In some cases the index may be more than 100, indicating that the EEO group is less concentrated at lower salary
levels. The distribution index is automatically calculated by the software provided by ODEOPE.
4. The distribution index is not calculated where EEO group or non-EEO group numbers are less than 20.
5. Data is compiled from information voluntered by employees.
Overseas travel
Purpose Employee Who Location Dates
Meet with
information service
providers
Patrick Cooper Peace TAB San Francisco, USA 30 July – 6 August 2004
Patrick Cooper
Laurie Byrne
Robert Flood
Peace Software Auckland, New Zealand 4-10 July 2004
4-5 July 2004
4-5 July 2004
Patrick Cooper Peace TAB San Francisco, USA 21-25 March 2005
Patrick Cooper Peace Software Auckland, New Zealand 7-8 June 2005
Patrick Cooper Peace Software Miami, USA 15-21 June 2005
Meet with insurers Justin De Lorenzo Various Insurers United Kingdom,
Switzerland
Presenter Geoff Fietz 2004
International
Powerline
Communications
Conference
Meet with
electricity
infrastructure
providers
Craig Murray
Bill Frewen
John Adams
Justin De Lorenzo
China Light
and Power
22–31 July 2004
Madrid, Spain 24–30 October 2004
Hong Kong 22–25 May 2005
Witness testing
of substation
equipment
Equipment training
Steve Wilson
Terry Parr
David Lindsay
Tom Fitzpatrick
Siemens Frankfurt, Germany 16-19 January 2005
Siemens Zurich, Switzerland 23 April – 14 May 2005
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Consultants
A total of $1.3 million was spent on consultants. Those
consultancies valued at more than $30,000 are shown
in the following table. An additional 21 consultancies
in management services ($154,416), legal ($55,711),
sub-transmission survey ($7,040) and organisational
review ($15,787) were valued at less than $30,000.
Supplier Description of services provided Amount
PricewaterhouseCoopers Business advice $204,047
KPMG Business / accounting advice $347,042
Deloitte Corporate Finance Valuation advice $60,000
Ernst & Young Tax and finance $227,976
Deacons Legal advice $233,813
Corrs Chambers Westgrath Legal advice $37,120
59
Legislative changes
As a New South Wales State Owned Corporation
(SOC), Country Energy is generally subject to the same
statutory and legal requirements as other businesses,
with the notable exception of the Corporations Act 2001
(Cth). The following are the main legislative and other
regulatory changes made during the reporting period
that impact on the company.
Commonwealth
• Renewable Energy (Electricity) Regulations 2001
(Cth). Amended by the Renewable Energy
(Electricity) Amendment Regulations (No. 1) 2005 to
reflect the renewable power percentages for 2004
and 2005. These are: 1.25% for 2004 and 1.64% for
2005.
• Australian Energy Market Act 2004 No. 99, which
provides that the National Electricity Law, the
National Electricity Code and Regulations will
apply in offshore areas.
Australian Capital Territory
• Electricity (Greenhouse Gas Emissions) Act 2004 No.
71, which seeks to reduce greenhouse gas emissions
by establishing a system of greenhouse gas
benchmarks for electricity producers and imposing
penalties for failing to meet these benchmarks.
• Electricity (Greenhouse Gas Emissions) Regulation
2004 No. 60 (ACT), which was made under the
Electricity (Greenhouse Gas Emissions) Act 2004 No.
71 (ACT) (‘EGGE Act’) and regulates the operation of
the Gas Abatement Scheme established under the
EGGE Act.
• Utilities (Electricity Restrictions) Regulation 2004
No. 61 (ACT), which was made under the Utilities
Act 2000 No. 65 (ACT) and allows the Minister to
approve a scheme that will limit the use of electricity
to, among other things, facilitate the provision of
‘efficient, reliable and sustainable’ electricity services,
including allowing the Minister to make a declaration
of an electricity restriction stage and allowing
licensed electricity distribution and connection
services provider to impose restriction measures
when such a declaration is in force.
• Utilities Amendment Act 2005 No. 14, which
amends the Utilities Act 2000 No. 65 (ACT) to
allow contracted maintenance service providers
to enter leased land ‘for the purpose of installing
or maintaining streetlight or stormwater drainage
infrastructure’.
• Electricity Safety Regulations 2004 No. 37 (ACT),
which was made under the Electricity Safety Act
1971 No. 30 (ACT) and makes specific provision for
the electrical wiring installation in a lift or escalator.
It also exempts electrical wiring work from AS 3000
and the New Zealand Standard 3000 if the work
complies with revised editions of the AS/NZ 3000
or is commenced on the day of and completed
within six months after the publication of the revised
edition.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

60
New South Wales
• Gas Supply (Network Safety Management)
Amendment Regulation 2004 No. 594 (NSW), which
extends the operation of the Gas Supply (Network
Safety Management) Regulation 2002 No. 629
relevant to gas fitting work.
• Statute Law (Miscellaneous Provisions)(No. 2)
Act 2004 No. 9, which repealed both the Energy
Administration (Natural Gas Rationing) Regulation
2004 No. 3 and the Energy Administration (Natural
Gas Rationing) Regulation (No. 2) 2004 No. 27.
The purpose of the Statute Law (Miscellaneous
Provisions) (No. 2) Act 2004 No. 91 was to repeal
expired and redundant Acts and instruments.
• Gas Supply (Miscellaneous Amendments) Regulation
2004 No. 274, which repeals parts 4 and 5 of the Gas
Supply (General) Regulation 1997 No. 435 (NSW) that
relate to review panels and the delegation power of
the Director General of the Department of Energy,
Utilities and Sustainability. This Regulation also
transfers certain provisions to the Gas Supply (Natural
Gas Retail Competition) Regulation 2001 No. 1013.
• Gas Supply (Natural Gas Retail Competition)
Amendment (Retailer of Last Resort) Regulation 2004
(NSW), which amends the Gas Supply (Natural Gas
Retail Competition) Regulation 2001 in relation to
last resort supply arrangements. The intention is to
protect small retail gas customers where their gas
supplier is unable to continue to supply gas.
In particular, if a ‘last resort supply event’ has taken
effect, the supplier must not supply gas to small retail
customers. The supplier must provide reasonable
assistance to the Minister for Energy and Utilities,
who may permit the supplier to recommence
supplying gas to small retail customers. In addition,
standard and negotiated customer supply contracts
between the supplier and a small retail customer
must provide that information concerning the
customer may be given to another supplier or other
prescribed entities, to implement last resort supply
arrangements.
• Electricity Supply (General) Amendment (Reduction
of Greenhouse Gas Emissions) Regulation 2004 No.
669, which amends the Electricity Supply (General)
Regulation 2001 and allows for accreditation of
persons as abatement certificate providers under the
Act with respect to proposed, as well as existing,
activities. It also enables such a provider to create
abatement certificates in respect of an activity that
occurred after the provider lodged an application for
accreditation as an abatement certificate provider.
• State Water Corporation Act 2004 No. 40, which
commenced on 30 June 2004 and established the
State Water Corporation (“the Corporation”) as a
State owned corporation under the State Owned
Corporations Act 1989 No. 134 (NSW).
• Environmental Planning and Assessment Amendment
(Infrastructure and Other Planning Reform) Act
2005 No. 43, which amends the Environmental
Planning and Assessment Act 1979 to reform landuse
planning and the development assessment and
approval system under that Act, particularly in respect
of State infrastructure or other significant projects
and land-use planning instruments.
• Threatened Species Legislation Amendment Act 2004
No. 88, which amends the National Parks and Wildlife
Act 1974 No. 80 (NSW). Under this amended act,
clearance of native vegetation that is authorised by a
property vegetation plan will not need to be licensed
under the Act. The amended Act also provides that
a person knowingly causes damage to the habitat
of a threatened species if they did not comply with
required development consent or approval under
the Planning and Assessment Act 1979 No. 203
(NSW). Under the amended act, a landowner will
be attributed with an offence against protected
fauna or threatened species on their land unless
another person committed the offence without the
landowner’s permission.
Victoria
• Electricity Safety (Installations) Regulations 1999 No.
49 (VIC), which was amended by the Electrical Safety
(Installations)(Amendment) Regulations 2004/58 (VIC)
and relates to changes to the definition of ‘hazardous
bushfire risk area’ and ‘low bushfire risk area’
(relevant to wiring methods and private electric lines).
• Electrical Safety (Electric Line Clearance) Regulations
2005 No. 74 (VIC), which provides for the prescription
of the Code of Practice for Electric Line Clearance
as required by the Electricity Safety Act 1998 No. 25
(VIC).
• Energy Legislation (Amendment) Act 2004 No. 91,
which extends the operation of measures designed
to protect customers of electricity retailers, including
requiring some electricity retailers to publish details
of their market tariffs and terms and conditions for
electricity supply to small retail customers.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

• Electricity Industry Act 2000 No. 68 (VIC), which was
amended by the Essential Services Commission
(Amendment) Act 2004 No. 75, so that certain
prescribed matters, determinations and requirements
have consistent meanings as provided by the
Essential Services Commission Act 2001 No. 62
(VIC).
• Energy Legislation (Regulatory Reform) Act 2004 No.
25, which amends the Electricity Safety Act 1998 No.
25 (VIC), the Electricity Industry (Residual Provisions)
Act 1993 No. 130 (VIC) and the Electricity Industry
Act 2000 No. 68 and seeks to facilitate the transition
to nationally consistent regulation of energy markets.
Queensland
• Electricity Safety Regulations 2002, which was
amended by the Electrical Safety Amendment
Regulation (No.1) 2005 and inserts new provisions
relating to electrical equipment testing, excavation
and underground electrical services by employers,
self-employed persons or principal contractors and an
extension of the term of approval by up to one year
and renewal of approval.
South Australia
• Australian Energy Market Commission Establishment
Act 2004 No. 24 (SA), which established the
Australian Energy Market Commission as the entity
responsible for the rule-making and development
of the national energy sector. The act provides for
the appointment of three Commissioners and sets
out the functions and objectives of the Commission
and other matters necessary to establish the
Commission.
• Electricity (General) Regulations 1997 No. 161
(SA), which is amended by the Electricity (General)
Variation Regulations 2004/252 (SA) and requires
certain electrical installations and infrastructure
development to comply with the Australian Standard
or the Australian/New Zealand Standard. The
regulation also amends the standards, codes,
guidelines and other documents relating to aerial
powerlines.
National Electricity Code
A number of amendments were made to the National
Electricity Code that either directly or indirectly affect
Country Energy. These include –
• The Victorian, the Australian Capital Territory, New
South Wales and South Australian derogations were
amended to extend the period in which the local
network service provider is to be the responsible
person for metering installations type 5, 6 and 7
until 31 December 2006.
• Tasmania became a participating jurisdiction within
the meaning of the National Electricity Law on 29
May 2005. Provisions were made for this transition
by Tasmania into the National Electricity Market.
• As of 5 May 2005, the reserve trader sunset
provisions under the code were extended until
1 July 2006.
• The defined communications between distribution
and retail companies operating in the national
market were altered and expanded. Protocols and
mechanisms of these communications support
transactions and information requirements of full
retail competition in addition to the existing Market
Settlements and Transfers Systems commenced on
21 April 2005.
• As of 8 April 2005, the code was amended in
respect to the transmission pricing arrangements
for TransGrid and Energy Australia.
• As of 17 February 2005, the code was amended to
address inadequate arrangements for management
of power system security and efficient utilisation of
available transmission capacity in the short-term.
• The obligation to provide a mid-year update of the
Statement of Opportunities was removed and the
yearly publication date changed.
• As of 1 July 2005, the roles and functions of NECA
were replaced by the Australian Energy Market
Commission and the Australian Energy Regulator.
• As of 2 December 2004, generators below a
10MW/40GWhr a year threshold received sitespecified
loss factors provided they meet network
service providers reasonable costs in calculating
these factors.
61
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Judicial decisions
• Application by East Australian Pipeline Limited
[2005] ACompT. The Australian Competition Tribunal
considered an application by East Australian Pipeline
Limited under section 39(1) of the Gas Pipeline
Access (South Australia) Act 1997 (‘the Gas Pipeline
Act’). The application was for review of an ACCC
decision concerning the method of depreciating
optimised replacement cost to arrive at depreciated
optimised, which the applicant argued was prohibited
by section 39(5) of the Gas Pipeline Act.
62
• Western Power Corporation v Koenig [2004] WASCA
119. The Western Australian Supreme Court (‘WA SC’)
considered the application of Regulation 63(1) of the
Electrical (Licensing) Regulations 1991. In particular,
the WA Supreme Court considered the reporting
obligations on Western Power Corporation following
an incident on a river, where a derrick attached to a
barge was struck by an overhead powerline.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Financial statements contents
Independent Audit Report 64
Statement by Members of the Board 65
Statement of Financial Performance 66
Statement of Financial Position 67
Statement of Cash Flows 68
Notes to the Financial Statements 69
Note 1. Significant Accounting Policies 69
a) Reporting Entity 69
b) Financial Reporting Framework 69
c) Principles of Consolidation 69
d) Change in Accounting Policies 69
e) Impacts of Adopting Australian Equivalents to
International Financial Reporting Standards 69
f) Recognition of Revenue 71
g) Valuation of Current Assets 72
h) Valuation of Property, Plant and Equipment 72
i) Valuation of Other Non-Current Assets 73
j) Liabilities 74
k) Income Tax 74
l) Goods and Services Tax 75
m) Electricity Purchases 75
n) Construction Contracts 75
o) Joint Venture 75
p) Foreign Currency 75
q) Rounding of Amounts 75
r) Exemptions 75
Financial Reporting Exemptions 76
Annual Reporting Exemptions 76
Note 2. Components of Revenue and Expenses 77
Note 3. Income Tax Expense 78
Note 4. Tax Assets 78
Note 5. Tax Liabilities 79
Note 6. Dividends 79
Note 7. Cash Assets 79
Note 8. Receivables 79
Note 9. Inventories 80
Note 10. Investments in Subsidiary Corporations 80
Note 11. Other Assets 80
Note 12. Property, Plant and Equipment 81
Note 13. Intangible Assets 82
Note 14. Deposits 82
Note 15. Payables 82
Note 16. Interest Bearing Liabilities 83
Note 17. Provisions 84
Note 18. Other Liabilities 84
Note 19. Components of Equity 85
Note 20. Finance Facilities 85
Note 21. Notes to the Statement of Cash Flows for
the Year Ended June 2005 86
Note 22. Financial Instruments – Consolidated 87
Note 23. Commitments 90
Note 24. Auditors’ Remuneration 91
Note 25. Directors’ Remuneration 91
Note 26. Related Parties 92
Note 27. Controlled Entities 92
Note 28. Statement of Operations by Segment 92
Note 29. Superannuation Plans 94
Note 30. Joint Venture 96
Note 31. Contingent Liabilities 96
Note 32. Events Subsequent to Balance Date 96
63
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Independent Audit Report
64
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Statement by Members
of the Board
65
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Statement of Financial Performance
for the year ended 30 June 2005
Consolidated
Corporation
Note 2005 2004 2005 2004
$’000 $’000 $’000 $’000
Revenue from Ordinary Activities 2 1,710,425 1,643,837 1,705,251 1,638,006
Expenses from Ordinary Activities excluding Borrowing
Costs and Employer Superannuation Contributions
Borrowing Costs
Employer Superannuation Contributions (refer note 29)
2 (1,442,950) (1,381,413) (1,440,987) (1,379,914)
(110,781) (111,295) (110,781) (111,295)
(5,717) (10,419) (5,717) (10,419)
Profit from Ordinary Activities before related
Income Tax Expense 150,977 140,710 147,766 136,378
Income Tax Expense relating to Ordinary Activities 3 (52,258) (62,371) (50,730) (61,105)
66
Profit from Ordinary Activities after related
Income Tax Expense 98,719 78,339 97,036 75,273
Net Profit Result Attributable to Members of the
Parent Entity
98,719 78,339 97,036 75,273
Increase (decrease) in asset revaluation reserve 14,658 - 14,658 -
Total changes in equity other than those resulting
from transactions with owners as owners 19 113,377 78,339 111,694 75,273
The accompanying notes form part of this Statement of Financial Performance.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Statement of Financial Position
as at 30 June 2005
Consolidated
Corporation
Note 2005 2004 2005 2004
$’000 $’000 $’000 $’000
Current Assets
Cash Assets 7 1,434 11,526 1,434 11,516
Receivables 8 210,900 219,093 218,693 229,130
Estimated Revenue from Unread Meters 1(f) 173,146 137,265 173,146 137,265
Inventories 9 19,975 19,534 19,975 19,534
Current Tax Assets 4 - - - -
Other Assets 11 26,675 7,073 26,675 7,073
Total Current Assets 432,130 394,491 439,923 404,518
Non-Current Assets
Receivables 8 38,542 25,382 38,542 25,382
Investments in Subsidiary Corporations 10 - - 36,871 36,871
Property, Plant and Equipment 12 2,614,694 2,359,749 2,490,113 2,235,023
Intangible Assets 13 23,007 25,955 8,479 9,543
Deferred Tax Assets 4 52,756 51,439 52,756 51,439
Other Assets 11 26,945 8,692 140,902 122,640
67
Total Non-Current Assets 2,755,944 2,471,217 2,767,663 2,480,898
TOTAL ASSETS 3,188,074 2,865,708 3,207,586 2,885,416
Current Liabilities
Payables 15 255,078 237,776 262,793 244,871
Deposits 14 13,801 15,542 13,801 15,542
Interest Bearing Liabilities 16 539,207 442,657 539,218 442,657
Current Tax Liabilities 5 23,348 46,339 23,348 46,339
Provisions 17 75,206 77,387 75,206 76,887
Other 18 2,562 3,572 605 1,259
Total Current Liabilities 909,202 823,273 914,971 827,555
Non-Current Liabilities
Interest Bearing Liabilities 16 1,199,710 1,081,785 1,199,710 1,081,785
Deferred Tax Liabilities 5 148,366 136,659 148,366 136,659
Provisions 17 107,301 96,761 107,301 96,761
Other 18 4,463 3,475 4,463 3,475
Total Non-Current Liabilities 1,459,840 1,318,680 1,459,840 1,318,680
TOTAL LIABILITIES 2,369,042 2,141,953 2,374,811 2,146,235
NET ASSETS 819,032 723,755 832,775 739,181
Equity
Contributed Equity
1(a),
19
95,563 95,563 95,563 95,563
Reserves 19
361,863 347,205 361,863 347,205
Retained Profits 19 361,606 280,987 375,349 296,413
Total Parent Entity Interest 819,032 723,755 832,775 739,181
TOTAL EQUITY 819,032 723,755 832,775 739,181
The accompanying notes form part of this Statement of Financial Position.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Statement of Cash Flows
for the year ended 30 June 2005
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
Note Inflows / (Outflows) Inflows / (Outflows)
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 1,806,649 1,714,535 1,801,612 1,711,817
Payments to suppliers & employees (1,428,887) (1,365,778) (1,429,529) (1,360,194)
Interest received 879 1,927 878 1,730
Interest and other costs of finance paid (121,267) (106,545) (121,267) (106,545)
Income tax refund/(paid) (64,860) 6,109 (63,332) 6,109
NET OPERATING CASH FLOWS 21 192,514 250,248 188,362 252,917
68
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment (392,976) (324,808) (388,825) (320,264)
Proceeds from sale of property, plant & equipment 6,982 9,553 6,982 9,553
Net sales of investments - - - 1,000
NET INVESTING CASH FLOWS (385,994) (315,255) (381,843) (309,711)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings 217,742 62,000 217,742 62,000
Repayment of borrowings (171) (4,455) (171) (4,455)
Net community service obligations received/(paid) 344 1,613 344 1,613
Dividends paid 6 (29,764) (29,764) (29,764) (29,764)
NET FINANCING CASH FLOWS 188,151 29,394 188,151 29,394
NET INCREASE/(DECREASE) IN CASH HELD (5,329) (35,613) (5,330) (27,400)
Cash at the beginning of the financial year 2,155 37,768 2,145 29,545
Cash at the end of the financial year 1(g),(I) (3,174) 2,155 (3,185) 2,145
The accompanying notes form part of this Statement of Cash Flows.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
The significant policies which have been adopted in the preparation of the financial statements are:
(a) Reporting Entity
Country Energy was formed on 1 July 2001 by the merger of three NSW electricity distributors. These distributors traded as
Advance Energy, Great Southern Energy and NorthPower.
Country Energy is incorporated under the State Owned Corporations Act 1989. Country Energy’s capital comprises two (2)
fully paid $1.00 ordinary shares issued to the Minister for Finance and another Minister, currently the Special Minister of
State and Assistant Treasurer. The $2.00 share capital has been included in the amount of contributed equity disclosed in the
Statement of Financial Position (refer note 19).
(b) Financial Reporting Framework
The accompanying statements are a general purpose financial report which has been prepared in accordance with the
requirements of the Public Finance and Audit Act 1983, the Public Finance and Audit Regulation 2000 and the State Owned
Corporations Act 1989. The financial statements have been prepared on an accrual accounting, going concern basis in
accordance with these Acts and Regulation, and are in conformity with Australian Accounting Standards, other authoritative
pronouncements of the Australian Accounting Standards Board and Urgent Issues Group Consensus Views.
69
The financial statements have been prepared in accordance with the historical cost convention and do not take account of
changes in the general purchasing power of the dollar except where stated.
Comparatives have been reclassified where necessary to enhance comparability in respect of changes in the current year.
Where prior year information was not disclosed, or where it is not practical to calculate the information, comparatives have
been omitted. Where this has occurred, references have been made accordingly throughout the financial statements.
Figures have been reclassified this year to incorporate changes required by new or revised accounting standards.
(c) Principles of Consolidation
The consolidated financial statements of the economic entity include the financial statements of the Corporation, being the
parent entity, and its controlled entities. Details of holdings in controlled entities appear in note 27.
The balances and effects of transactions with the controlled entities included in the financial statements have been eliminated.
The controlled entities are EMMLINK Pty Limited, NorthPower Energy Services Pty Limited and Country Energy Gas Pty
Limited. In the prior year controlled entities included EastCoast Gas Pty Ltd. This entity was deregistered during the previous
year.
NorthPower Energy Services Pty Limited did not operate during the year.
(d) Change in Accounting Policies
The accounting policies are consistent with those applied in the previous year.
(e) Impacts of Adopting Australian Equivalents to International Financial Reporting Standards
Country Energy will apply the Australian Equivalents to International Financial Reporting Standards (AEIFRS) from the reporting
period beginning 1 July 2005.
(i) Managing the transition
The strategy to manage the transition to AEIFRS includes the following key components.
• Consultants have analysed the standards and Urgent Issues Group Abstracts to identify key areas regarding policies,
procedures, systems and financial impacts affected by the transition
• The differences between AGAAP and AEIFRS have been identified
• A project plan was prepared and is being followed to resolve these differences and assist with the transition.
• The Audit and Risk Committee is overseeing the transition. The Group General Manager, Finance and Business Development
is responsible for the project and reports regularly to the Committee on progress against the plan.
• The plan identifies the steps required to design and implement the necessary processes, procedures and policies to
achieve transition.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
• The plan has been structured into three areas of significance. Progress to date on the three areas is as follows:
1: Financial Instrument Standards - AASB 132: Financial Instruments: Disclosure and Presentation and AASB 139: Financial
Instruments: Recognition and Measurement Standards.
2: All other standards.
3: General Matters - Documentation, policies, processes and reports.
All plan steps are either completed or near completion in accordance with the timetable.
(ii) Impact on the financial reports by changes in accounting policies
Country Energy has identified the key areas where changes in accounting policies are expected to impact the financial
reports. Some of these impacts arise because AEIFRS requirements are different from existing AASB (AGAAP) requirements.
Other impacts are likely to arise from options in AEIFRS. To ensure consistency at whole of government level, NSW Treasury has
advised the options that it is likely to mandate.
70
The following table and associated reference notes disclose the impacts and their financial effects on the entity’s equity and profit.
The table includes NSW Treasury’s likely mandates. The values disclosed are management’s best estimates as at the time of
preparing the 30 June 2005 financial statements. Country Energy does not anticipate any material impacts on its cash flows.
The final effect of the transition may differ from the estimated figures below because of pending changes to the AEIFRS, including
the UIG Interpretations and/or emerging accepted practice in their interpretation and application. Country Energy’s accounting
policies may also be effected by a proposed standard to harmonise accounting standards with Government Finance Statistics
(GFS). However, the impact is uncertain because it depends on when this standard is finalised and whether it can be adopted
in 2005-06.
Reconciliation of key aggregates:
Reconciliation of equity under existing Standards (AGAAP) to equity under AEIFRS
30 JUNE
2005
1 JULY
2004
NOTES $000 $000
Total equity under AGAAP 819,032 723,755
Adjustments to accumulated funds
Revaluation of defined benefit superannuation net asset 1 (53,419) (40,807)
Adjustment for the write back of accumulated depreciation on reclassified
property, plant and equipment
2 582 482
Adjustment for goodwill amortisation 3 464 -
Derecognition of capital contributions 4 (36,673) (31,480)
Recognition of emission rights asset/(liability) - RECs 5 2,563 (1,076)
Recognition of emission rights asset/(liability) - NGACs 5 (4,410) (146)
Tax effect adjustment for revalued defined benefit superannuation 6 4,520 4,702
Tax effect adjustment for pre June 2002 developer and customer capital
contributions
7 (56,525) (58,955)
Tax effect adjustment on derecognition of capital contributions 8 11,002 9,444
Tax effect adjustment for RECs 9 (769) 323
Tax effect adjustment for NGACs 9 1,323 44
Tax effect adjustment for revalued assets 10 (96,871) (94,454)
Total equity under AEIFRS $590,819 $511,832
Reconciliation of surplus/(deficit) under (AGAAP) to surplus/(deficit) under AEIFRS
Year Ended 30 June 2005 NOTES $000
Surplus under AGAAP 98,719
Defined benefit superannuation 1 (12,612)
Reclassification from pp&e to investments 2 100
Goodwill 3 464
Capital contributions 4 (5,193)
Recognition of intangibles 5 (625)
Tax effect on defined benefits superannuation deficit 6 (182)
Tax effect adjustment for pre June 2002 capital contributions 7 2,430
Tax effect on capital contributions income derecognition 8 1,558
Tax effect on intangibles 9 187
Tax effect adjustment for revalued assets 10 1,980
Surplus/(deficit) under AEIFRS $86,826
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
Notes to tables above
1. AASB 119: Employee Benefits requires a recalculation of defined benefit scheme assets, based on the government bond rate at each
reporting date rather than the long term expected rate of return on the plan assets. Country Energy contributes to four defined benefit
plans and the value of the adjustment disclosed in the table represents the aggregate of the recalculated balances. The superannuation
position has moved from a net asset to a net liability position.
2. AASB 139: Financial Instruments: Recognition & Measurement: requires that ‘available-for-sale financial assets’ be recognised at fair
value. Country Energy’s joint venture investment in the Wind Farm (refer note 30) falls under the definition and as a consequence the
investment has been reclassified from property, plant and equipment to investments. The requirement to disclosure the asset at fair
value results in a write back of accumulated depreciation.
3. Goodwill is not amortised under AEIFRS but is tested for impairment annually. AASB 1 provides that previously amortised goodwill is
not recapitalised. The adjustment as at 30 June 2005 reverses the goodwill charge recognised under AGAAP for the current year.
4. UIG 1017: Developer & Customer Contributions for Construction in a Price Regulated Market: requires developer & customer
contributions (capital contributions) to be recognised when the asset is completed in accordance with the term and conditions of the
contribution. Contributions must be recognised at fair value. The opening balances have been adjusted to ensure that they represent
only revenue receivable (asset) or revenue prepaid (liability), in accordance with the standard.
5. UIG 3: Emission Right states that for traded emission rights, the entity’s allowance to rights should be recognised as an intangible
asset under AAS138: Intangible Assets, and that the obligation to surrender allowances should be recognised as a liability. Country
Energy trades Renewable Energy Certificates (RECs) and NSW Greenhouse Abatement Certificates (NGACs) both of which fall under
the standard’s definition of intangible assets. As at 1 July 2004 the number of certificates held was less than the number required to be
surrendered, therefore a net liability existed. The value of this liability is disclosed separately for each type of certificate. As at 30 June
2005, Country Energy held surplus of RECs at market value relative to the target to surrender.
A net liability position existed for NGACs as the market value of NGACs at balance date had increased.
71
6. A deferred taxation asset arises with the recognition of the net superannuation liability. In this case Country Energy expects that future
contributions will be deductible for tax. The tax effect is calculated at 30% of the reduction in liability of $0.605 million
7. AASB 112: Income Taxes requires a balance sheet approach to tax effect accounting. The net book value of pre-June 2002 capital
contributions of $196.520 million are considered to have no tax base. On transition to AEIFRS, the difference between the accounting
base and the tax base will give rise to a deferred tax liability. The liability is estimated to be $58.955 million at a tax rate of 30%.
8. A deferred taxation asset also arises from the derecognition of capital contributions. The tax effect is calculated at 30% of the $36.673
million deferred income noted in item 4.
9. A deferred tax asset arises as there will be a tax deduction for the purchases of RECs and NGACs in the period to 31 December 2004
(refer item 5).
10. A deferred taxation liability also arises from the assets revalued by the former distributor NorthPower (refer note 19). The liability has
been calculated at 30% of the $313.270 million difference between the tax value and carrying value.
(ii) Financial Instruments
In accordance with NSW Treasury’s indicative mandates, Country Energy will apply the exemption provided in AASB 1 First-time
Adoption of Australian Equivalents to International Financial Reporting Standards not to apply the requirements of AASB 132
and AASB 139 for the financial year ended 30 June 2005.These standards will apply from 1 July 2005. None of the information
provided in the preceding table includes any impacts for financial instruments. However when these Standards are applied, they
are likely to impact on retained earnings (on first adoption) and the amount of volatility of profit. Further, the impact of these
Standards will in part depend on whether the fair value option can or will be mandated consistent with Government Finance
Statistics.
(f) Recognition of Revenue
Revenue relating to Country Energy’s core operations is classified as revenue from operating activities for the purposes of note 2.
All other revenue is classified as revenue outside operating activities for the purposes of note 2.
(i) Sales revenue
Sales revenue comprises revenue earned (net of returns, discounts and allowances) from the provision of products or services and
is recognised when the goods are provided or when the fee in respect of services provided is receivable.
(ii) Revenue from unread meters
Revenue from unread meters is calculated at balance date for those customers who at balance date, did not have their meters
read and invoiced. The calculation is based on their estimated consumption. A change in the method of estimation of this item has
led to an additional $5.146 million being recognised in the current reporting period.
(iii) Interest income
Interest income is recognised on an accrual basis using the interest applicable to the financial asset.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
(iv) Asset sales
The gross proceeds of sale of assets is recognised as revenue and is brought to account when control of the asset passes
to the buyer.
(v) Capital contributions
Capital contributions are monies paid by customers, or prospective customers, seeking an augmentation of the electricity and gas
distribution systems in circumstances where, in the ordinary course of events, such augmentation would not be undertaken by
Country Energy.
Capital contributions are recognised as revenue in proportion to the stage of completion of the related augmentation works.
Assets that are contributed to Country Energy by customers, are treated as capital contributions and are valued at fair value (refer
note 1(h)(vi)).
72
(g) Valuation of Current Assets
(i) Cash assets
For the purposes of the Statement of Financial Position, cash assets include cash on hand and investments at call (refer note 7).
For the purposes of the Statement of Cash Flows, cash includes cash assets net of bank overdraft (refer note 21).
(ii) Receivables
Trade debtors are carried at amounts due. Collectability of debt is assessed at balance date. A general provision is determined
after having considered the ageing of the debt and the credit risk of the debtors (refer note 8).
(iii) Investments
Investments are recorded at cost. Any change in market value is recognised as revenue.
(iv) Inventories
Inventories have been valued at the lower of cost and net realisable value. Cost is determined using the average purchase price of
each item and comprises the cost of purchase including the cost of bringing the inventories to their appropriate location. The major
components of inventories are capital stores and consumables used in the maintenance of the distribution network.
(h) Valuation of Property, Plant and Equipment
(i) System assets
The network system assets were valued as at 30 June 2005 by Sinclair Knight Merz an “Optimised Depreciated Replacement
Cost” (ODRC) methodology.
Theses assets were also valued by PricewaterhouseCoopers (PWC) using a “Discounted Cash Flow” (DCF) Methodology”.
The carrying values of the system assets at balance date are supported by the independent valuations.
Included as components of the system assets are generation assets. These assets are separately identifiable and their future cash
flows can be reasonably determined. PWC carried out a DCF valuation of these assets resulting in the carrying value being written
down by $1.470 million to the Statement of Financial Performance.
(ii) Land and buildings
The 30 June 2005 land and building asset values of Country Energy were valued by Colliers International Consultancy and
Valuation Pty Limited (Colliers) using a “Fair Value” methodology. Colliers determined that the fair value was $88.633 million.
In accordance with the Colliers valuation the carrying value of the assets has been increased by $14.658 million. The increase has
been recorded in the asset revaluation reserve.
(iii) Other plant and equipment.
Country Energy’s other non-current physical assets comprise of non-specialised assets with short useful lives. Examples are
motor vehicles, office equipment and computer equipment. These assets are disclosed at fair value which is equivalent to their
depreciated historical cost. For this class of asset depreciated historical cost is an acceptable measure for fair value because the
difference between theses valuations is unlikely to be material. The cost of obtaining an accurate fair value is not justified with
regard to the potential benefits received.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
(iv) The assets of EMMLINK Pty Limited
The 30 June 2001 carrying values of the subsidiary’s system assets were independently valued by KPMG Corporate Finance (Aust)
Pty Ltd. The valuations were adopted by the Directors at 30 June 2001 and became part of the Country Energy Consolidated
Group at fair value on 1 July 2001. The assets are recorded at balance date at fair value.
(v) The assets of Country Energy Gas Pty Limited
The subsidiary’s gas system assets were valued during 2004 by Deloitte Corporate Finance Pty Ltd using a DCF methodology.
The 30 June 2004 carrying values of the assets were supported by the valuation.
The carrying values of the assets at balance date are comprised of the carrying values at 30 June 2004, plus additions less
depreciation. During the period to 30 June 2005 there has been no material change to the expected carrying values of the assets
or assumptions used in the DCF valuation.
The carrying values of the gas system assets at balance date are supported by the independent valuation.
(vi) Asset acquisition
The value of assets acquired during the year includes the cost of acquisition, the cost of materials, labour and an appropriate
proportion of overheads.
73
Assets that are contributed by customers are recorded at fair value (refer note 1(f)(v)).
(vii) Fair Value
Assets are recorded at fair value at balance date. These assets are cash generating assets. They are of a specialised nature and
there is no evidence available to support a market price. The fair value of the assets has been determined by the present value of
future net cash inflows.
(viii) Depreciation
The carrying value of property, plant and equipment is net of depreciation where applicable.
Depreciation is calculated for all items of property plant and equipment, except freehold land, based on the estimated useful
remaining life of the asset. The straight line or reducing balance methods are used.
Depreciation expense is recognised in the Statement of Financial Performance. Accumulated depreciation is written back against
the asset when the asset is revalued.
The estimated remaining lives to the entity for each class of asset are as follows:
Buildings
Leasehold improvements
System assets
Other assets
40 years
Term of lease
5 – 60 years
1 – 10 years
(i) Valuation of Other Non-Current Assets
(i) Investments
Shares held by the corporation in its subsidiaries are eliminated in the consolidated financial statements.
Cash investments are recorded at fair value. Changes to the market value of cash investments are recorded in the Statement of
Financial Performance or the asset revaluation reserve in accordance with Australian Accounting Standard AASB 1041 ‘Revaluation
of Non-Current Assets’.
(ii) Intangible assets
The largest components of intangible assets are Natural Gas Business Licences. These were acquired when the former Great
Southern Energy purchased the Natural Gas Business from the Council of the City of Wagga Wagga.
The difference between the cost of the Natural Gas Business and the value of the total assets is the value of the intangible asset,
being Distribution and Retail licences (refer note 13).
These licences entitle Country Energy to distribute and retail Natural Gas within the Wagga Wagga region, as well as to other
contestable markets. The licences have been brought to account having regard to the expected net cash flows derived from
holding the licences, and are based on an independent valuation, at the time of acquisition, as part of the allocation of the
purchase price of the assets acquired. Amortisation is over a ten year period on a straight line basis. Nothing has occurred to
suggest the terms and conditions of the issuance of the licences have not been complied with to support the carrying value
of the asset. The values of these licences are reviewed annually.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
Goodwill, representing the excess of the cost of acquisition over the fair value of the identifiable net assets acquired is amortised
on a straight line basis over a period of 10 years.
The carrying values of Country Energy’s Gas business’s intangible assets are supported by the Deloitte Corporate Finance Pty Ltd
DCF valuation as disclosed in note (h)(v).
Franchise and alliance fees, relating to business undertakings with external parties are amortised on a straight line basis over a
period of 10 years.
(iii) Leased assets
Country Energy has not entered into any finance leases. Operating leases are not capitalised and rental payments are charged
against operating profit in the period in which they are incurred (refer note 23).
74
(j) Liabilities
(i) Payables
Payables are recognised when the corporation is obliged to make a future payment for the purchase of goods or services.
Payables are recorded at fair value.
(ii) Interest bearing liabilities
Interest bearing liabilities are disclosed at their capital value.
(iii) Discount and premiums on loans
Discounts and premiums on loans are netted against the appropriate interest bearing liabilities.
(iv) Loans to subsidiaries
Country Energy has lent $57.5 million to EMMLINK Pty Limited and $56.5 million to Country Energy Gas Pty Limited.
Due to a resolution taken by the Board of Country Energy, these loans will not place in jeopardy the solvency of the subsidiaries
(refer note 11).
(v) Employee benefits
The provision for employee benefits to wages, annual leave, sick leave and long service leave represents the amount which
Country Energy has a present obligation to pay resulting from employees’ services provided up to balance date.
The amounts provided have been apportioned between current and non-current provisions, the current provision being
that portion which is expected to be paid within the ensuing twelve months (refer note 17).
In calculating wages and annual leave, nominal amounts have been used based on current wages and salaries, including related
on costs.
The amounts recognised for sick leave and long service leave are calculated in accordance with Australian Accounting Standard
AASB 1028: Employee Benefits. Sick leave and long service leave were calculated by an independent actuary, Cumpston Sarjeant
Pty Ltd. The non-current portion of the long service leave liability has been discounted using rates attaching to Commonwealth
government securities at balance date.
(k) Income Tax
The economic entity operates within the National Tax Equivalent Regime (NTER) administered by the Australian Taxation Office
on behalf of the NSW Government.
Tax effect accounting principles are applied to the financial statements. Timing differences which arise from items of income
and expense, being brought to account in different periods for income tax and accounting purposes are carried forward in the
Statement of Financial Position as a future income tax benefit or a provision for deferred income tax.
Future income tax benefits relating to tax losses are only brought to account when their realisation is virtually certain. All other
future benefits are brought to account only when realisation of the asset is beyond reasonable doubt.
The Country Energy group has elected to consolidate for NTER purposes as part of a tax sharing arrangement which provides
for the allocation of income tax expense and liabilities across the wholly owned subsidiaries and a tax funding agreement which
provides intercompany funding to cover current and deferred tax balances contributed by the individual subsidiaries to the head
entity.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
(l) Goods and Services Tax
Revenue, expenses and assets (other than receivables) are recognised net of the amount of goods and services tax (GST), except
where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of expense.
Receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or current liability in the Statement
of Financial Position.
Cash flows are included in the Statement of Cash Flows on a gross basis. The GST component of cash flows arising from
investing and financing activities which are recoverable from, or payable to, the ATO are classified as operating cash flows.
(m) Electricity Purchases
Country Energy purchases electricity in the National Electricity Market for resale to its customers. Changes in the spot market
may generate adverse financial effects. In order to minimise the risk, electricity trading positions are hedged. The gains and losses
arising from these hedging transactions are brought to account on settlement and are included as part of electricity purchases
(refer note 22(d)(i)).
75
(n) Construction Contracts
Profit is recognised on fixed price construction contracts in proportion to the progress on each contract when all of the following
conditions are satisfied:
• total contract revenues to be received and the costs to complete the contract can be reliably estimated;
• the stage of contract completion can be reliably determined; and
• the costs attributable to the contract date can be clearly identified and can be compared with prior estimates.
Profit is recognised on cost plus construction contracts in proportion to the progress on each contract when all of the following
conditions are satisfied:
• the costs attributable to the contract to date can be clearly identified;
• costs to complete other than those that will be specifically reimbursable under the contract can be reliably estimated; and,
where relevant,
• the stage of contract completion can be reliably determined.
Any material losses on construction contracts are brought to account as soon as they are foreseeable.
(o) Joint Venture
Interest in joint ventures have been reported in the financial statements by including the economic entity’s share of assets
employed, and share of liabilities incurred, in their respective classification categories (refer note 30).
(p) Foreign Currency
Foreign currency transactions are converted to Australian currency at the rates of exchange applicable at the dates of the
transactions.
The treatment of foreign currencies that are hedged together with outstanding foreign currency balances, are set out in note
22(d)(ii).
(q) Rounding of Amounts
Amounts in the financial statements have been rounded to the nearest thousand dollars unless specifically stated otherwise.
(r) Exemptions
Exemptions have been granted by the Treasurer under Section 41BA of the Public Finance and Audit Act and Section 15 of the
Regulation, so that the financial reporting requirements which apply are broadly consistent with the Corporations Act reporting
requirements, given that the entity is competing in the national electricity market.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
The following specific disclosures are not required to be made as a result of the exemptions:
Financial Reporting Exemptions
Public Finance and Audit Act – Format of financial statements
• Section 41B(c) PF&AA – Financial Statements
Schedule 1, Part 1: PF&A Reg – Notes – Income and expenditure
• Item 2 - Amounts set aside for renewal or replacement of fixed assets.
• Item 4 - Amounts set aside to any provision for known commitments.
• Item 6 - Amount appropriated for repayment of loans / advances / debentures / deposits.
• Item 13 - Material items of income and expenditure on a program or activity basis.
Schedule 1, Part 3: PF&A Reg – Notes – Additional information
76
• Item 13 - Excess of non-current asset value over replacement cost.
Annual Reporting Exemptions
Budgets
Report of Operations
Management & Activities
Research & Development
Human Resources
Consultants
Land Disposal
Consumer Response
Payment of Accounts
Time for Payment of Accounts
s.7(1)(a)(iii) ARSBA
cl 6 ARSBR
s.7(1)(a)(iv) ARSBA
Schedule 1 ARSBR
Schedule 1 ARSBR
Schedule 1 ARSBR
Schedule 1 ARSBR
Schedule 1 ARSBR
Schedule 1 ARSBR
Schedule 1 ARSBR
Schedule 1 ARSBR
Report on Risk Management &
Insurance Activities
Schedule 1 ARSBR
Disclosure of Controlled Entities Schedule 1 ARSBR
Investment Management Performance cl. 13 ARSBR
Liability Management Performance cl. 12 ARSBR
Financial Statements of
Controlled Entities
s.7(1)(a)(ia) ARSBA
# Reference
ARSBA – Annual Reports (Statutory Bodies) Act 1984 PF&AA – Public Finance & Audit Act 1983
ARSBR – Annual Reports (Statutory Bodies) Regulation 2000 PF&A Reg – Public Finance and Audit Regulation 2000
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
NOTE 2. COMPONENTS OF REVENUE AND EXPENSES
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
Revenue from Operating Activities
Sale and delivery of energy 1,618,157 1,518,189 1,612,984 1,512,555
Capital contributions (refer note 1(f)) 70,974 68,932 70,974 68,932
Rental income (refer note 23(e)) 776 1,174 776 1,174
Other revenue from ordinary activities 12,863 43,854 12,863 43,854
1,702,770 1,632,149 1,697,597 1,626,515
Revenue from Outside the Operating Activities
Investment revenue (refer note 1(f)) 879 1,927 878 1,730
Proceeds on sale of property, plant & equipment 6,776 9,761 6,776 9,761
7,655 11,688 7,654 11,491
Total Revenues from Ordinary Activities 1,710,425 1,643,837 1,705,251 1,638,006
77
Expenses Relating to Ordinary Activities
Cost of sale and delivery of energy 1,420,062 1,334,151 1,418,099 1,332,652
Cost of other revenue from ordinary activities 22,888 47,262 22,888 47,262
Total Expenses Relating to Ordinary Operations 1,442,950 1,381,413 1,440,987 1,379,914
Expense Items Included in Total Expenses relating
to Ordinary Operations
Expenses from Operating Activities
Amounts charged against provisions for employee benefits 38,973 39,374 38,973 39,374
Depreciation of property, plant and equipment 145,256 127,888 140,961 123,606
Amortisation of intangible assets 2,947 2,981 1,063 1,097
Consultants expenses 1,309 810 1,309 810
(Amounts capitalised $0.034 million)
Bad debts expense 5,334 5,909 5,334 5,909
Minimum lease payments on operating leases (refer notes 1(i)
and 23)
9,496 9,779 9,496 9,779
Expenses from Outside Operating Activities
Carrying value of property, plant & equipment sold 5,961 8,387 5,961 8,387
Other Business Activities
Country Energy carries out a number of commercial business activities which are incidental to, associated with, or are related to the
supply and delivery of energy. Individually these activities are not of significant size, nature or incidence. The aggregate of revenue
from these activities of $17.940 million (includes internal sales $5.073) ($43.854 million in 2004) is included in other revenue from
ordinary activities. The aggregate of expenses from these activities of $16.926 million ($40.837 million in 2004) is included in the cost
of other revenue from ordinary activities.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
NOTE 3. INCOME TAX EXPENSE
The income tax expense for the financial year differs from the amount calculated on the profit. The difference reconciles as follows:
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
Operating profit from ordinary activities before related
income tax expense 150,977 140,710 147,766 136,378
Prima facie tax thereon at 30% 45,293 42,212 44,330 40,913
78
Tax effect of permanent differences
Entertainment expense 135 100 135 100
Legal expenses 133 69 133 69
Employer superannuation overfunded
contributions
(3,966) (1,921) (3,966) (1,921)
Net realised gain from investment 120 120 120 120
Book depreciation on capital contributed
assets
2,430 2,425 2,430 2,425
Book depreciation on revalued assets 1,831 1,832 1,831 1,832
Non-deductible asset revaluations - - - -
Non-deductible goodwill amortisation 140 168 - 28
Non-deductible intangibles amortisation 743 755 318 329
Non-assessable/deductible (gains)/losses
on loans
- - - -
Non-deductible provision 90 - 90 -
Sundry items 14 - 14 -
Remove tax effect on prior year
adjustments
Prior year (over)/under provision of
income tax
2,709
- 179 - -
(8,136)
2,709 (7,358)
Adjustment to prior year tax 2,586 24,568 2,586 24,568
Total income tax expense attributable to operating profit 52,258 62,371 50,730 61,105
NOTE 4. TAX ASSETS
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
Non-Current
Future Income Tax Benefit 52,756 51,439 52,756 51,439
Total Non-Current Tax Assets 52,756 51,439 52,756 51,439
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
NOTE 5. TAX LIABILITIES
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
Current
Provision for Income Tax 23,348 46,339 23,348 46,339
Total Current Tax Liabilities 23,348 46,339 23,348 46,339
Non-Current
Deferred Income Tax liability 148,366 136,659 148,366 136,659
Total Non-Current Tax Liabilities 148,366 136,659 148,366 136,659
NOTE 6. DIVIDENDS
Dividends were paid during the year of $29.764 million ($29.764 million in 2004).
79
A dividend of $18.100 million has been provided for at balance date ($29.971 million in 2004).
NOTE 7. CASH ASSETS
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
Cash and deposits 91 93 91 83
Investments at Call - TCorp at cost 1,343 11,433 1,343 11,433
Total Cash Assets 1,434 11,526 1,434 11,516
NOTE 8. RECEIVABLES
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
Current
Trade debtors 113,688 122,225 113,500 122,048
Provision for doubtful debts (3,309) (3,538) (3,309) (3,538)
Trade debtors, net of provision 110,379 118,687 110,191 118,510
Other debtors 101,110 100,805 100,884 100,704
Provision for doubtful debts (589) (399) (589) (399)
Other debtors, net of provision 100,521 100,406 100,295 100,305
Subsidiary debtors - - 8,207 10,315
Total Current Receivables 210,900 219,093 218,693 229,130
Non-Current
Other debtors 163 221 163 221
Over-funded superannuation 38,379 25,161 38,379 25,161
Total Non-Current Receivables 38,542 25,382 38,542 25,382
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
NOTE 9. INVENTORIES
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
Inventories - at lower of cost and net realisable value 19,975 19,534 19,975 19,534
Total Inventories 19,975 19,534 19,975 19,534
NOTE 10. INVESTMENTS IN SUBSIDIARY CORPORATIONS
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
80
Investments in subsidiary corporations - - 36,871 36,871
Total Investments in Subsidiary Corporations - - 36,871 36,871
NOTE 11. OTHER ASSETS
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
Current
Prepayments 26,675 7,073 26,675 7,073
Total Current Other Assets 26,675 7,073 26,675 7,073
Non-Current
Prepayments 25,575 7,247 25,575 7,247
Other assets 1,370 1,445 1,370 1,436
Loans to subsidiaries - - 113,957 113,957
Total Non-Current Assets 26,945 8,692 140,902 122,640
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
NOTE 12. PROPERTY, PLANT AND EQUIPMENT
Consolidated Corporation
2005 2005
$’000 $’000
System Assets:
Opening carrying value
At fair value 2,554,501 2,414,513
Accumulated depreciation (458,639) (443,377)
Net opening carrying value 2,095,862 1,971,136
Movements
Additions 293,705 289,555
Disposals (1,418) (1,418)
Depreciation expense (91,324) (87,029)
Net movements 200,963 201,108
Closing carrying value
At fair value 2,846,295 2,702,154
Accumulated depreciation (549,470) (529,910)
Net closing carrying value 2,296,825 2,172,244
81
Land and Buildings
Opening carrying value
At fair value 78,971 78,971
Accumulated depreciation (8,630) (8,630)
Net opening carrying value 70,341 70,341
Movements
Additions 13,014 13,014
Revaluation 14,658 14,658
Disposals (526) (526)
Depreciation expense (2,755) (2,755)
Net movements 24,391 24,391
Closing carrying value
At fair value 94,732 94,732
Net closing carrying value 94,732 94,732
Plant and Equipment
Opening carrying value
At fair value 412,820 412,820
Accumulated depreciation (219,274) (219,274)
Net opening carrying value 193,546 193,546
Movements
Additions 86,201 86,201
Disposals (5,434) (5,434)
Depreciation expense (51,176) (51,176)
Net movements 29,591 29,591
Closing carrying value
At fair value 488,054 488,054
Accumulated depreciation (264,917) (264,917)
Net closing carrying value 223,137 223,137
Net Carrying Value of Property, Plant and Equipment 2,614,694 2,490,113
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
NOTE 13. INTANGIBLE ASSETS
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
Franchise Setup Fees 76 76 76 76
Accumulated amortisation (38) (30) (38) (30)
Alliance 16 16 16 16
Accumulated amortisation (16) (16) (16) (16)
Net Setup and Alliance 38 46 38 46
Goodwill 4,701 4,701 51 51
Accumulated amortisation (1,523) (1,058) (51) (51)
Net Goodwill 3,178 3,643 - -
82
Natural Gas Distributor and Retail licences
at Directors’ Valuation 24,740 24,740 10,552 10,552
Accumulated amortisation (4,949) (2,474) (2,111) (1,055)
Net Natural Gas Distributor and Retail licences 19,791 22,266 8,441 9,497
Total Intangible Assets 23,007 25,955 8,479 9,543
NOTE 14. DEPOSITS
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
Current
Electricity Customers 12,747 14,475 12,747 14,475
Contractors and Others 1,054 1,067 1,054 1,067
Total Current Deposits 13,801 15,542 13,801 15,542
Deposits are paid by customers and contactors as security against the entity’s assets or debts held by those customers. These are
liabilities that may be repayable after balance date.
NOTE 15. PAYABLES
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
Current
Trade creditors - unsecured 14,678 13,164 14,678 13,125
Other creditors - unsecured 43,671 45,801 43,636 45,745
Accrued interest expense 40,757 42,961 40,757 42,961
Accrued energy and transmission purchases 138,099 102,027 138,099 102,027
Accrued trade creditors 14,910 29,583 14,910 29,583
Accrued inventory purchases 1,404 1,874 1,404 1,874
Other accrued expenses 1,559 2,366 1,464 2,294
Subsidiary creditors - unsecured - - 7,845 7,262
Total Current Payables 255,078 237,776 262,793 244,871
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
NOTE 16. INTEREST BEARING LIABILITIES
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
Current
Bank Overdraft 4,608 9,371 4,619 9,371
Loans 534,599 433,286 534,599 433,286
Total Current Interest Bearing Liabilities 539,207 442,657 539,218 442,657
Non-current
Loans 1,199,710 1,081,785 1,199,710 1,081,785
Total Non-Current Interest Bearing Liabilities 1,199,710 1,081,785 1,199,710 1,081,785
Due to be repaid:
Not later than one year 539,207 442,656 539,218 442,656
Later than one year but not later than two years 198,782 281,899 198,782 281,899
Later than two years but not later than five years 466,486 452,841 466,486 452,841
Later than five years 534,442 347,046 534,442 347,046
83
Total Interest Bearing Liabilities 1,738,917 1,524,442 1,738,928 1,524,442
All loans are guaranteed by the NSW Government.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
NOTE 17. PROVISIONS
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
Current
Dividends 18,100 29,764 18,100 29,764
Employee benefits 45,220 41,462 45,220 41,462
Provision for Merger with Australian Inland (refer note 32) 3,321 - 3,321 -
Provision for environmental rectification 4,575 1,910 4,575 1,910
Other provisions 3,990 4,251 3,990 3,751
Total Current Provisions 75,206 77,387 75,206 76,887
Non-Current
Employee benefits 107,301 96,761 107,301 96,761
84
Total Non-Current Provisions 107,301 96,761 107,301 96,761
Movement in Provisions
(i) Dividends
Opening carrying amount 29,764 29,764
Additional provision 18,100 18,100
Amounts utilised during the year (29,764) (29,764)
Closing carrying amount 18,100 18,100
(ii) Provision for Merger with Australian Inland
Closing carrying amount 3,321 3,321
The provision was recognised for the first time
during the year.
(iii) Provision for environmental rectification
Opening carrying amount 1,910 1,910
Additional provision 2,700 2,700
Amounts utilised during the year (35) (35)
Closing carrying amount 4,575 4,575
(iv) Other provisions
Opening carrying amount 4,251 3,751
Additional provision 1,690 1,690
Amounts utilised during the year (1,951) (1,451)
Closing carrying amount 3,990 3,990
Other provisions reflect liabilities arising in the course of the Corporation’s operating activities.
NOTE 18. OTHER LIABILITIES
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
Current
Deferred interest 584 648 584 648
Other liabilities 1,978 2,924 21 611
Total Current Other liabilities 2,562 3,572 605 1,259
Non-Current
Deferred Interest 2,867 3,451 2,867 3,451
Under-funded superannuation liability 2 24 2 24
Other liabilities 1,594 - 1,594 -
Total Non-Current Other Liabilities 4,463 3,475 4,463 3,475
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
NOTE 19. COMPONENTS OF EQUITY
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
Contributed Equity
Opening Balance 95,563 95,563 95,563 95,563
Contributed Equity Closing Balance 95,563 95,563 95,563 95,563
Asset Revaluation Reserve
Opening balance 347,205 347,205 347,205 347,205
Revaluation increment on land and buildings (refer note 1(h)(ii) ) 14,658 - 14,658 -
Asset Revaluation Reserve Closing Balance 361,863 347,205 361,863 347,205
Retained Profits
Opening Balance 280,987 232,619 296,413 251,111
85
Movement:
Profit from ordinary activities after income tax expense 98,719 78,339 97,036 75,273
Dividends Provided and Paid (18,100) (29,971) (18,100) (29,971)
Retained Profits Closing Balance 361,606 280,987 375,349 296,413
The Asset Revaluation Reserve comprises increments and decrements resulting from revaluations of property, plant and equipment.
NOTE 20. FINANCE FACILITIES
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
At balance date the Corporation had access to the following
finance facilities:
Bank overdraft 12,000 12,000 12,000 12,000
Lines of credit 313,530 287,930 313,530 287,930
Loans 1,712,000 1,621,000 1,712,000 1,621,000
Total available finance facilities 2,037,530 1,920,930 2,037,530 1,920,930
At balance date the unused amounts of those facilities listed
above were:
Bank overdraft 12,000 12,000 12,000 12,000
Lines of credit 279,290 119,795 279,290 119,795
Loans 7,692 105,929 7,692 105,929
Total unused finance facilities 298,982 237,724 298,982 237,724
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
NOTE 21. NOTES TO THE STATEMENT OF CASH FLOWS FOR THE YEAR ENDED JUNE 2005
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
(a) Components of Cash
Cash on Hand 91 93 91 83
Cash at Bank/(Overdraft) (4,608) (9,371) (4,619) (9,371)
Investment securities 1,343 11,433 1,343 11,433
(3,174) 2,155 (3,185) 2,145
(b) Reconciliation of operating profit from ordinary activities after income tax expense to cash provided
by operating activities
86
Profit from Ordinary Activities after Income Tax Expense 98,719 78,339 97,036 75,273
Consolidation Adustment - (2,252) - -
Items classified as investing/finance activities:
(Profit)/loss on sale of property, plant and equipment (814) (1,373) (814) (1,373)
Net Community Service Obligation expense 6 179 6 179
Deferred Interest 1,019 - 1,019 -
Non-cash items:
Amounts set aside to provisions (2,969) 60,785 (2,469) 60,785
Depreciation 145,256 127,887 140,961 123,606
Amortisation 2,947 2,981 1,063 1,097
Write down of non-current assets 1,470 - 1,470 -
Prepaid superannuation (13,241) (6,403) (13,241) (6,403)
Increase/(decrease) in deferred taxes payable 10,390 20,919 10,390 17,102
Changes in assets and liabilities during the financial year:
(Increase)/decrease in unread meters (35,880) (39,057) (35,880) (39,057)
(Increase)/decrease in receivables 7,633 (16,443) 9,881 (10,672)
(Increase)/decrease in inventories (441) (593) (441) (593)
(Increase)/decrease in prepayments and other current assets (19,602) (3,027) (19,602) (2,926)
(Increase)/decrease in operating non-current receivables 58 892 58 892
(Increase)/decrease in other operating non-current assets (18,251) (7,143) (18,260) 397
Increase/(decrease) in operating payables 17,306 33,199 17,921 33,896
Increase/(decrease) in customer deposits (1,741) 1,416 (1,741) 1,416
Increase/(decrease) in other operating liabilities 649 (58) 1,005 (702)
Net cash provided by operating activities 192,514 250,248 188,362 252,917
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
NOTE 22. FINANCIAL INSTRUMENTS – CONSOLIDATED
(a) Interest Rate Risk
The Corporation enters into contracts to manage cash flow risks associated with the interest rates on borrowings that are floating, or to alter interest rate exposures arising from
mismatches in repricing dates between assets and liabilities.
The Corporation’s exposure to interest rate risk and the effective weighted average interest rate for classes of financial assets and financial liabilities is set out below:
Fixed interest rate maturing in:
Weighted avg.
interest rate
Total
Non-interest
bearing
More than 5
years
1 year or less 1 to 5 years
Floating interest
rate
Note 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004 2005 2004
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 % %
2005 Financial
Assets
Cash 7 - - - - - - - - 91 93 91 93 - -
Investments 7,10 1,343 11,433 - - - - - - - - 1,343 11,433 5.59 5.25
Receivables 8 - - 105 204 143 109 - - 422,340 381,427 422,588 381,740 5.07 10.37
Other 11 - - - - - - - - 53,620 15,765 53,620 15,765 - -
Total Financial
Assets 1,343 11,433 105 204 143 109 - - 476,051 397,285 477,642 409,031
2005 Financial Liabilities
Overdraft 16 4,608 9,371 - - - - - - - - 4,608 9,371 8.60 8.35
Borrowings 16 351,787 416,306 270,517 114,928 577,586 636,973 534,419 346,864 - - 1,734,309 1,515,071 6.31 6.03
Payables 15 - - - - - - - - 255,078 237,776 255,078 237,776 - -
Other 14,18 1,000 1,000 - - - - - - 19,826 21,589 20,826 22,589 - 3.83
Total Financial
Liabilities 357,395 426,677 270,517 114,928 577,586 636,973 534,419 346,864 274,904 259,365 2,014,821 1,784,807
87
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
(b) Credit Risk Credit risk represents the loss that would be recognised if counterparties failed to meet their
financial obligations.
The credit risk of financial assets, excluding investments, of the Corporation which have been recognised on the Statement
of Financial Position is reflected in the carrying amount net of any provision for doubtful debts.
The Corporation minimises concentrations of credit risk by undertaking transactions with a large number of customers and
counterparties in Australia. The Corporation is not materially exposed to any individual customer or counterparty.
Credit risk related to derivative contracts is minimised by ensuring counterparties are approved under the Masters Agreements
of the International Swaps and Derivatives Association Inc (ISDA).
Foreign exchange contracts are subject to credit risk in relation to the relevant counterparties, which are principally large banks.
The maximum credit risk exposure on foreign exchange contracts is the full amount of foreign currency the Corporation pays.
88
(c) Net Fair Value of Financial Assets and Liabilities
Financial instruments are carried at net fair value unless stated otherwise. These are disclosed in note 22(a) above.
Other than loan debt which is actively managed under a risk management agreement with NSW Treasury Corporation (TCorp),
financial assets and liabilities are not readily traded on organised markets in standardised form.
All financial instruments are disclosed on the Statement of Financial Position.
(d) Derivative Financial Instruments
The Corporation is exposed to changes in interest rates, foreign exchange rates and commodity prices from its activities. The following
derivative instruments are used to hedge these risks: interest rate futures contracts, forward foreign exchange contracts and futures
commodity price contracts. Derivative financial instruments are not held for speculative purposes.
(i) Electricity Purchases
The Corporation enters into wholesale market contracts to minimise exposure to fluctuations in wholesale market electricity prices.
The Corporation’s policy is to manage its exposure in line with the forecast volumes of committed retail customers.
For its franchise load, the Corporation operates under the Electricity Tariff Equalisation Fund (ETEF), administered by NSW Treasury.
Under the ETEF, the Corporation pays a set price for its electricity purchases and is not exposed to pool price variation.
For its contestable load, the Corporation’s policy is to actively manage the exposure arising from its forecast contestable load. In doing
so, the Corporation has entered various hedging contracts (bought and sold swaps and options) with individual market participants.
Any unhedged position exposes the Corporation to pool price variation. The Corporation’s policy is that the exposure and the consequent
contract price risk are managed within Board approved limits.
As these contracts can be settled other than by physical delivery of the underlying commodity, they are classified as financial
instruments in accordance with Australian Accounting Standard AAS33 “Presentation and Disclosure of Financial Instruments”.
In entering into these contracts for the purposes of managing the risks associated with retail sales, the gains and costs of entering
these contracts and any realised or unrealised gains and losses are deferred until the underlying sales occur. On settlement, the
contracted price is compared to the spot price on that date and the price differential is applied to the contracted quantity. A net amount
is paid or received by the entity.
The following table details the terms and values of the Corporation’s outstanding electricity hedging contracts at the reporting date.
Contracts
Net Fair
Value
Net Fair
Value
Face
Value
Face
Value
2005 2004 2005 2004
$’000 $’000 $’000 $’000
1 year or less 213,673 273,015 198,058 259,552
1 to 5 years 178,653 269,805 159,633 251,744
More than 5 years 289 13,169 181 10,993
392,615 555,989 357,872 522,289
At balance date, the Corporation’s electricity hedging contracts generated a net unrecognised gain of $34.74 million (gain of $33.70
million in 2004). As these contracts are held for the purpose of hedging contracted mass-market customer sales and contracted
commercial and industrial customer load, no ultimate net gain is expected upon realisation. The net unrecognised gain is calculated
in accordance with prices sourced from the Australian Financial Markets Association (AFMA). The AFMA market price estimates are
based on prices usually quoted for small volume contracts and are therefore not necessarily representative of independent market
price valuations for the larger volume contracts entered into by the Corporation, for which there are no readily available market price
valuations.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
All contracts are due to be settled within 17 years of the reporting date.
(ii) Foreign Exchange Contracts
The Corporation enters into forward foreign exchange contracts to hedge certain anticipated purchase commitments denominated in
foreign currencies (refer note 1(p)).
The Corporation’s policy is to enter into forward foreign exchange contracts to hedge 100% of foreign currency risk where contract
value exceeds $0.05 million within Board approved limits. The amount of anticipated future purchases is forecast in light of
commitments from suppliers.
The details of outstanding forward foreign exchange contracts are listed in the following table:
2005 2004 2005 2004
$’000 $’000 Weighted Exchange Rate
Settlement less than
12 months
Buy NZ dollars 1,135 - 1.07 -
Buy Canadian dollars - 29 - 0.93
Buy Euros - 71 - 0.57
Buy US dollars - - - 0.59
89
As these contracts are hedging anticipated purchases, any unrealised gains and losses on the contracts together with the costs of the
contract will be recognised in the financial statements at the time the underlying transaction occurs. The net unrecognised gain on
hedges for anticipated foreign currency purchases at 30 June 2005 was $0.021 million ($0.011 million loss in 2004).
Where the underlying transaction ocurred on or before balance date, the effect of the hedge has been recognised in the financial
statements.
(iii) Interest Rate Swaps
Interest rate swap transactions entered into by the Corporation exchange variable and fixed interest payment obligations to protect long
term borrowings from the risk of increasing interest rates. Variable and fixed interest rate debt is held, and swap contracts are entered,
to receive interest at both variable and fixed rates.
The settlement dates of the swap contracts correspond with interest payment dates of the borrowings. The swap contracts require
settlement of the net interest receivable or payable and are brought to account as an adjustment to borrowing costs.
The details of interest rate swap contracts are listed in the following table:
Notional Principal
Market Value Unrecognised
Gains/(Losses)
Effective Avg Interest
Rate Payable
2005 2004 2005 2004 2005 2004
$’000 $’000 $’000 $’000 % %
Settlement due within 12 Months 45,000 49,500 (285) (31) 10.81 5.19
Settlement due in 1 to 2 years - 94,451 - (667) 0 5.74
Settlement due in 2 to 5 years 104,000 198,356 (3,648) (4,645) 6.41 6.08
Settlement due after 5 years 314,000 170,193 (14,920) (10,071) 6.48 7.26
463,000 512,500 (18,853) (15,414)
(iv) Futures Contracts
Interest rate risk arises from an exposure to future movements in interest rates and Futures Contracts are undertaken in order to hedge
against that risk. Futures contracts seek to position the corporation’s debt portfolio at a point where our debt managers believe interest
rates will move.
The details of futures contracts are listed in the following table:
Futures Contracts
Notional Principal
Market Value Unrecognised
Gains/(Losses)
2005 2004 2005 2004
$’000 $’000 $’000 $’000
SFE 3 year bond futures 98,100 - 98 -
SFE 10 year bond futures 66,500 - 31 -
164,600 - 129 -
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
NOTE 23. COMMITMENTS
a. Capital expenditure commitments
Estimated capital expenditure contracted for at
balance date but not provided for
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
- not later than one year 21,924 29,812 21,924 29,812
- later than one year and not later than five years 11,571 7,262 11,571 7,262
- later than five years 539 - 539 -
34,034 37,074 34,034 37,074
Capital expenditure commitments include
input tax credits 3,094 3,370 3,094 3,370
90
b. Operating expenditure commitments
excluding leases
Estimated operating expenditure contracted for at
balance date but not provided for
- payable not later than one year 27,118 42,934 26,821 42,692
- later than one year and not later than five years 33,698 24,642 32,279 24,620
- later than five years 9,948 8,861 7,748 8,578
70,764 76,437 66,848 75,890
Operating expenditure commitments include
input tax credits 6,433 6,949 6,077 6,899
c. Operating lease (equipment) expenditure commitments
(refer note 1(i) )
- not later than one year 1,493 3,082 1,493 3,082
- later than one year and not later than five years 1,042 1,419 1,042 1,419
2,535 4,501 2,535 4,501
Equipment Lease expenditure commitments include
input tax credits 230 409 230 409
d. Operating lease (property) expenditure commitments
(refer notes 1(i) )
- not later than one year 5,120 4,552 5,120 4,552
- later than one year and not later than five years 13,147 15,155 13,147 15,155
- later than five years 194 1,795 194 1,795
18,461 21,502 18,461 21,502
Property Lease expenditure commitments include
input tax credits 1,678 1,955 1,678 1,955
e. Operating lease (property) revenue commitments
(refer note 1(i) )
- not later than one year 960 984 960 984
- later than one year and not later than five years 2,304 2,642 2,304 2,642
- later than five years 32 75 32 75
3,296 3,701 3,296 3,701
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
There are 2,394 non-cancellable equipment leases referred to in section (c) above. This includes leases for 2,393 items of computer
equipment.
The majority of the leases have no contingent rentals, renewal options, conditions or restrictions.
Minimum lease payments total $2.535 million ($4.501 million in 2004), including input tax credits of $0.230 million ($0.409 million
in 2004). There are 136 non-cancellable property leases referred to in (d) above.
The majority of the leases have contingent rentals either based on CPI or some other increment, and renewal options between
1 and 5 years.
Minimum lease payments total $5.164 million ($4.408 million in 2004) including input tax credits of $0.469 million ($0.401 million
in 2004). There are no conditions or restrictions.
Additional to the group noted above, there are two leases with five year plus five year renewal options.
Minimum lease payments are $13.297 million ($17.094 million in 2004), including input tax credits of $1.209 million ($1.554 million
in 2004). Minimum lease payments upon renewal, will be based on the market value applying at the time.
The lease may be assigned in part or in whole, and sublet in part or in whole, with the consent of the lessor.
There are 102 property leases referred to in (e) above.
The following values have been recognised in the financial statements in respect of the revenue earning leases.
91
2005 2004
$’000 $’000
Gross amount of asset 7,825 7,461
Accumulated depreciation 890 697
Depreciation recognised as an expense 160 151
Lease commitments receivable 159 251
NOTE 24. AUDITORS’ REMUNERATION
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
Remuneration received, or due and receivable, by the auditor
of the economic entity for:
- An audit or review of the financial statements 415 441 385 406
Remuneration received, or due and receivable, by auditors,
other than of the auditor of the economic entity for:
- An audit or review of the financial statements 34 34 34 34
NOTE 25. DIRECTORS’ REMUNERATION
The aggregate amount of remuneration paid or due and payable,
directly or indirectly to directors, but excluding salaries of full
time officers:
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
406 403 406 403
The aggregate amount paid to superannuation plans during the
financial year for the benefit of directors: 37 36 37 36
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
NOTE 26. RELATED PARTIES
Directors
The names of persons holding the position of Director of Country Energy during the financial year are:
Barbara Ward (Chairman)
Craig Murray (Managing Director)
Michael Lee
Greg McLean
Tim Sullivan OAM
Rowena Sylvester
John Wearne AM
Details of directors’ remuneration are set out in note 25.
Some Directors of Country Energy are also Directors of other companies, or have a substantial interest in other companies or entities,
that may have had transactions with Country Energy during the year. A Register of Directors’ Interests is confirmed and noted at each
meeting of the Board. During the year no Directors declared material interests in any matters discussed at the meetings.
92
Wholly-owned Group
The wholly-owned group consists of Country Energy and its wholly-owned controlled entities, EMMLINK Pty Limited, NorthPower
Energy Services Pty Limited and Country Energy Gas Pty Limited.
Ownership interests in these entities is set out in note 27.
Other Related Parties
Country Energy has an interest in a joint venture. Details are set out in note 30.
NOTE 27. CONTROLLED ENTITIES
The Group includes a consolidation of the following controlled entities, incorporated in Australia.
Name of Entity Shares Held Interest
EMMLINK Pty Limited 10,000,000 Ordinary shares - $1 each 100%
NorthPower Energy Services Pty Limited 2 Ordinary shares - $1 each 100%
Country Energy Gas Pty Limited 26,870,593 Ordinary shares - $1 each 100%
The following is a comparison of consolidated key figures for each subsidiary and their proportion to group
totals.
Total Revenue
Operating Profit (Loss)
Before Income Tax
Total Assets
2005 2004 2005 2004 2005 2004
$’000 $’000 $’000 $’000 $’000 $’000
Country Energy 1,697,311 1,632,957 147,766 139,851 3,039,167 2,717,011
EMMLINK Pty Limited 3,853 1,498 794 (1,249) 50,492 49,705
NorthPower Energy Services Pty Limited - - - - - -
Country Energy Gas Pty Limited 9,261 9,382 2,417 2,108 98,415 98,992
Group Total 1,710,425 1,643,837 150,977 140,710 3,188,074 2,865,708
NOTE 28. STATEMENT OF OPERATIONS BY SEGMENT
Segment information is prepared in conformity with the accounting policies of the entity as disclosed in note 1 and the Australian
Accounting Standard AASB 1005 Segment Reporting.
Segment revenues, expenses, assets and liabilities are those that are directly attributable to that segment, and also include any portion
that can be allocated to that segment on a reasonable basis. Segment assets and liabilities include those that are used by that segment
and includes allocations of assets and liabilities attributable to that segment using appropriate drivers as a reasonable estimate.
Segment assets exclude income tax assets and financing assets. Segment liabilities exclude income tax liabilities, dividend provision,
borrowings, bank overdraft and other financing liabilities.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
Business Segments
The consolidated entity operates in the Energy Segment. This involves the distribution and retailing of electricity and gas. Revenue is
earned from sales to both franchise and contestable customers as well as from electricity retailers for the use of its electricity network.
Geographical Segments
The consolidated entity operates in one geographical segment, being Australia.
Energy Other Eliminations Consolidated
2005 2004 2005 2004 2005 2004 2005 2004
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
PRIMARY REPORTING
- BUSINESS SEGMENTS
Revenue
Sales to external
customers
Inter-segment
sales
1,618,157 1,518,189 13,643 45,029 - - 1,631,800 1,563,218
- - 5,073 - (5,073) - - -
93
Total Sales
Revenue 1,618,157 1,518,189 18,716 45,029 (5,073) - 1,631,800 1,563,218
Other revenue 77,746 78,651 - 41 - - 77,746 78,692
Total Segment Revenue 1,695,903 1,596,840 18,716 45,070 (5,073) - 1,709,546 1,641,910
Reconciliation of Segment Revenue To Entity Revenue from
Ordinary Activities
Total segment revenue 1,709,546 1,641,910
Add: investment income 879 1,927
Revenue from ordinary
activities 1,710,425 1,643,837
Expenses
Non cash expenses
included in segment
results 42,310 40,631 - - (5,073) - 42,310 40,631
Depreciation and
amortisation included in
segment results 148,203 127,888 109 96 - - 148,312 127,984
Segment Result 259,814 246,905 1,065 3,173 - - 260,879 250,078
Reconciliation of Segment Result to Entity Net Profit after Tax
Segment Result 260,879 250,078
Add: revenues excluded
from segment result 879 1,927
Less: expenses excluded
from segment result (110,781) (111,295)
Profit from ordinary
activities before income
tax expense
150,977 140,710
Income tax expense (52,258) (62,371)
Profit from ordinary
activities after income
tax expense 98,719 78,339
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
Assets and Liabilities
Energy Other Eliminations Consolidated
2005 2004 2005 2004 2005 2004 2005 2004
$’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000
Segment assets 2,915,147 2,696,018 218,737 106,725 - - 3,133,884 2,802,743
Assets excluded from
segment assets 54,190 62,965
Total Entity Assets 3,188,074 2,865,708
Segment Liabilities 410,690 348,381 47,721 86,132 - - 458,411 434,513
Liabilities excluded from
segment liabilities 1,910,631 1,707,440
Total Entity Liabilities 2,369,042 2,141,953
94
SECONDARY REPORTING - GEOGRAPHICAL SEGMENTS
Revenue by location of customer 1,709,546 1,641,910
Carrying amounts of segment assets by location 3,133,884 2,802,743
Acquisition of non-current assets by location 392,920 326,292
NOTE 29. SUPERANNUATION PLANS
The Corporation contributes to one defined contribution and several defined benefit employee superannuation plans of the Energy
Industries Superannuation Schemes Pty Ltd. The Corporation also contributes to a defined employee benefit plan of the Electricity
Supply Industry Superannuation (Qld) Ltd.
In the case of the defined benefit employee superannuation plans, employer contributions are based on the advice of the plans’
actuaries. Employee contributions are based on various percentages of employee gross salaries. After serving a qualifying period all
employees are entitled to benefits on retirement, disability or death.
The plans provide defined benefits based on years of service and final average salary. In accordance with the various Trust Deeds the
Corporation is under no legal obligation to make up any shortfall in the plans’ assets to meet payments due to employees.
An assessment of the defined benefit plans as at 30 June 2005 was carried out by FuturePlus Financial Services Pty Limited for NSW
employees. The actuaries used by the trustees were William M Mercer Pty Limited (NSW). The authorities concluded that the assets of
the plans were sufficient to meet all benefits payable in the event of the plans’ termination or the voluntary or compulsory termination
of all contributors of the Corporation.
The most recent assessment of the defined benefit plans for QLD employees was performed in June 2002 by Electricity Supply
Industry Superannuation (Qld) Ltd. At that time, the actuaries used by the trustees were NSP Buck Pty Limited (QLD), who concluded
that the assets of the plan were sufficient to meet all benefits payable in the event of the plan’s termination or the voluntary or
compulsory termination of all contributors of the Corporation.
Accordingly, the amounts included in this disclosure for the Electricity Supply Industry Superannuation Fund (Qld) is the most recent
information available, being measured as at 1 July 2002.
Only four Country Energy employees belong in the Electricity Supply Industry Superannuation Fund (Qld), and as such, the amounts
disclosed are not material.
The accrued benefits and plan assets at net market value are set out below. Accrued benefits are benefits which the plans are presently
obliged to pay at some future date as a result of membership of the plans.
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
The directors, based on the advice of the trustees of the plans, are not aware of any changes in circumstances since the date of the
most recent financial statements of the plans which would have a material impact on the overall financial position of the plans.
The 2005 estimates are based on the table of assumptions below. The actuary has made these estimates based upon a number of
assumptions in relation to member “exits” from the schemes.
Actuarial Assumptions 2005 2006 2007 Thereafter
% % % %
Energy Industries Superannuation Scheme
Rate of Investment return 12.5 7.5 7.5 7.5
Rate of salary escalation 4.0 4.0 4.0 4.0
Rate of CPI increase 2.5 2.5 2.5 2.5
State Superannuation Scheme & State Authorities Non-Contributory Superannuation Scheme
Rate of Investment return 7.0 7.0 7.0 7.0
Rate of salary escalation 4.0 4.0 4.0 4.0
Rate of CPI increase 2.5 2.5 2.5 2.5
95
Actuarial assumptions are not available for the Electricity Supply Industry Superannuation Fund (Qld).
2005 2004
$’000 $’000
Employer contributions paid to the plans during the financial year 18,958 16,822
DEFINED BENEFIT
PLANS
Plans Assets at Market
Value
Total Accrued
Benefits
Excess/(Deficit)
2005 2004 2005 2004 2005 2004
$’000 $’000 $’000 $’000 $’000 $’000
Energy Industries Superannuation
Scheme 193,345 172,624 155,324 147,638 38,021 24,986
State Superannuation
Scheme 506 440 321 297 185 143
State Authorities Non-Contributory
Superannuation Scheme 43 17 45 41 (2) (24)
State Authorities
Superannuation Scheme 149 6 - - 149 6
Electricity Supply Industry
Superannuation Fund (Qld) 922 922 898 898 24 24
194,965 174,009 156,588 148,874 38,377 25,135
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Notes to the Financial Statements
for the year ended 30 June 2005
The total amount of excess between the market values and accrued benefits of the plans, has been recognised as a receivable in
the Statement of Financial Position (refer note 8). Where the plans accrued benefits exceed the market values, a liability has been
recognised in the Statement of Financial Position (refer note 18).
The movement during the year being an increase in the excess has been recognised as revenue in the Statement of Financial
Performance.
The components of the amounts disclosed in the Statement of Financial Performance are as follows:
2005 2004
$’000 $’000
Contribution valuation adjustment (13,241) (6,403)
Superannuation cost 18,958 16,822
5,717 10,419
96
NOTE 30. JOINT VENTURE
Country Energy has a 20% participating joint venture interest in a wind farm.
Consolidated
Corporation
2005 2004 2005 2004
$’000 $’000 $’000 $’000
The Corporation’s share of the assets employed in the joint venture is
included in the consolidated Statement of Financial Position under the
classification of Non-Current Assets - property, plant and equipment. 1,519 1,587 1,519 1,587
NOTE 31. CONTINGENT LIABILITIES
There are no known contingent liabilities that would impact on the state of affairs of the economic entity or have a material effect on
these financial statements.
NOTE 32. EVENTS SUBSEQUENT TO BALANCE DATE
On 1 July 2005 pursuant to section 84 of the Electricity Supply Act 1995, the boundaries of Country Energy were altered to include the
distribution district of the former Australian Inland Energy Water Infrastructure.
Also on that date, pursuant to section 14 of the Energy Services Corporations Act 1995, the State Owned Corporation of Australian
Inland Energy Water Infrastructure was removed from Schedule 5 of the State Owned Corporations Act 1989. This resulted in the
dissolution of that corporation. Also from that date Country Energy replaced Australian Inland Energy Water Infrastructure as the State
Owned Corporation listed as a water supply authority under Part 3 of Schedule 3 of the Water Management Act 2000.
As a result of these administrative changes, on 1 July 2005 the net assets and equity of Country Energy were increased by the
amounts of net assets and equity held by Australian Inland Energy Water Infrastructure on 30 June 2005. The operating activities
of Country Energy also increased by a factor equivalent to the sum of the operating activities of Australian Inland Energy Water
Infrastructure.
END OF AUDITED FINANCIAL STATEMENTS
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Customer information
The following publications are available at
www.countryenergy.com.au, from customer service
centres or through our call centre on 13 23 56.
Network and pricing
Capital contributions
Electricity network services pricing and service
Information Package 2001
Electricity Supply Standard
Network price list August 2002
Reimbursement scheme for rural and large
load customers
Electricity Network Performance Report
Wagga Wagga Gas Network Pricing 2005
Adelong, Gundagai and Tumut Gas Transportation
Charges November 2004
Bombala and Cooma Gas Transportation Charges
November 2004
SW Slopes Gas Transportation Charges
November 2004
CE Gas Access Arrangement Wagga Wagga Gas
Network 1999
Proposed network improvements
Electricity System Development Review 2002
Joint TransGrid and Country Energy request for
proposals for demand management or local
generation on the Mid North Coast
Retail regulation
Country Energy regulated retail price list – July 2005
Standard form customer supply contract (Electricity)
Summary for small retail customers of standard form
electricity connection contract
Your rights regarding bills and charges for electricity
Standard form customer connection contract
Negotiated short form customer connection contract
Standard Form Contract – terms and conditions for the
supply of natural gas
Summary for small retail customers of Country Energy
Standard form gas contract
Your rights regarding bills and charges for gas
Electricity Industry Guideline No.13: Greenhouse gas
disclosure on electricity customers’ bills
Guideline No.10: Confidentiality and explicit informed
consent – electricity and gas
Victorian Interim Operating Procedure – wrongful
disconnections
Corporate
Annual Report 2003-2004
Bushfire risk management
Connecting to the electricity network
Country Energy’s Privacy Policy
Environment Policy
Identifying potential cogeneration sites
Sponsorship Guidelines
Statement of Affairs for the Period Ending
30 June 2003
Vegetation Management Plan
What all residents should know about living with
electricity easements
What to do if the lights go out
Safety
Christmas lights safety checklist
Customer Installation Safety Plan
Electrical hazard awareness
Electrical Safety Rules Code of Practice
Health and Safety Policy
Keep structures a safe distance
Public Electrical Safety Awareness Plan
Safety first handbook
Natural gas safety and you
Structures near powerlines
Safety fact sheets
97
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Glossary of terms
98
ADSL
AHO
ATL
AMOSS
BPL
CAIDI
CIO
CIS
CPI
CRIA
CRM
CSC
CTP
DMS
DEUS
EAPS
EBIT
EEO
EMP
EMS
ENMAC
EWON
FCCC
FSC
GEMP
GWh
HASRIG
HIRAC
IPART
IS
ISI
ISP
KPI
kV
LGSA
LPG
Asymmetric Digital Subscriber Line
Aboriginal Housing Office
Average Time Lost - The average number
of days lost per lost time injury
Asset Management and Operating Support
System
Broadband Powerline
Customer average interruption duration index
Chief Information Officer
Customer Information System
Consumer Price Index
Communication Research Institute of Australia
Customer Relationship Management
Customer Service Centre
Compulsory Third Party
Distribution Management System
Department of Energy, Utilities and
Sustainability
Ethnic Affairs Priority Statement
Earnings Before Interest and Tax
Equal Employment Opportunity
Environmental Management Plan
Environmental Management System
Energy Network Management and Control
Energy and Water Ombudsman New
South Wales
First contact complaint completion
Field Service Centre
Government Energy Management Policy
Gigawatt hour (Quantity of energy – one
GWh = 1,000 megawatt hours
Health and Safety Regional Improvement
Groups
Hazard Identification and Risk Assessment
and Control
Independent Pricing and Regulatory Tribunal
Information Services
Injury Severity Index – Takes into account both
the number and the severity of injuries and is
obtained by multiplying the LTIFR by the ATL
Internet Service Provider
Key Performance Indicator
Kilovolts (1kV = 1,000 volts)
Local Government and Shires Association
Liquid Petroleum Gas
LTI
LTIRF
LRS
MoU
MTI
MW
NGAC
OH & S
OHSCC
OHSMS
OSC
PABX
PC
PHSSG
PLC
PPA
PSC
REC
RSC
SAIDI
SAIFI
SCADA
SMS
SOC
SPT
SWMS
UPS
VISP
VOIP
VOSC
VPN
WIN
Lost Time Injury (the absence of an
employee for one day, or shift, caused
by a work related illness or injury)
Lost Time Injury Frequency Rate (the
number of LTI’s multiplied by one million
divided by the total hours worked by the
workforce)
Line Route Selection
Memorandum of Understanding
Medically Treated Injuries
Megawatt
New South Wales Greenhouse Abatement
Credits
Occupational Health and Safety
Occupational Health and Safety Corporate
Committee
Occupational health and safety
management system
Operations Service Centre
Private Automatic Branch Exchange
Personal Computer
Peak Health and Safety Steering Group
Powerline Communications
Power Purchase Agreement
Public Safety Coordinator
Renewable Energy Credits
Regional Safety Coordinator
System Average Interruption Duration
Index
System average interruption frequency
index
Supervisory Control and Data
Acquisition
Short Message Service
State Owned Corporation
Soul Pattinson Telecommunications
Safe Work Method Statements
Uninterrupted Power Supply
Virtual Internet Service Provider
Voice over internet protocol
Virtual Operations Service Centre
Virtual Private Network
Works Improvement Notice
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Index
A
Achievements inside cover
Advertising campaigns
- ACE campaign 10
- Some things just go
together campaign 15
Annual report production 100
Apprentices 44-45
Asset management 21
Asset inspection 22
Audit and risk committee 54
Audit report 64
B
Billing 13, 15
Board Committees 54
Board of Directors 50
Board meeting attendance 55
Board performance 53
Brand 36
C
Call centres 13
Ceinternet 16
Chairman and Managing
Director’s report 4
Code of conduct 56
Community consultation 40
Community satisfaction 36
Commercial partnerships 30
Company details back cover
Compancy based
classifications 48
Consultants 59
Constitution 52
Contact details 100
Contents
inside cover
Controlled entities 56
Corporate governance 52
countrygreen TM energy 14
Country Support 37
Crisis management 24
CSIRO 16
Customers
- Complaints 38
- Newsletters 16
- Satisfaction 12
- Available publications 96
- Focus groups 12
Customer service centres 37
Customer information
system 24
D
Dashboard 3
Demand management 28
Disability plan 57
E
Employees
- Apprentices 44-45
- Assistance Program 49
- Development programs 47
- Jobs growth 44
- Long service 45
- Survey 13, 45
Energy and Water Ombudsman
of NSW (EWON) 39
Energy efficiency
- Binda Bigga project 28
- energy answers 14
- Energy wise calculator 28
- Scholarship 30
- Smart metering 28
- Water heating 15
Environmental management
system 32
Establishment of Country
Energy 52
Enterprise Award 49
Environment 28
Equal employment
opportunity 57-58
Ethical standards 56
Ethnic Affairs Priority Statement 42
Executive remuneration 57
Executive team 51
F
Field service centres 37
Financial performance 63
Financial statements 69
First aid 9
First contact complaint
completion program (FCCC) 38
Fleet management 26
Freedom of information 56
G
Gas
- Greenfields 26
- LPG 15
- Natural 16
Glossary 97
Green energy 29
Green fleet 34
Greenhouse gas reduction 30
H
High performance culture 46
I
Indemnities 53
Independent Pricing and
Regulatory Tribunal (IPART) 24
Indigenous employment program 44
Industrial relations 49
Information services 25
Insurance 55
Internal customer satisfaction 13
L
Legislative changes 59
Licence compliance 56
Local government 40
Lost time injuries 6
LPG 15
M
Management delegations 55
Maps 1, 18, 29
N
Networks
- Improvements 18-19
- Independent review 21
- Investments 18
- Pricing 24
New customers 12
Non-management meetings 53
Notes to the financial 6-95
statements
Noxious weed guide 34
O
Organisational health 46
Organisation overview 1
Overseas visits 58
P
Performance inside cover
Powerful Health 8
Prices 24
Priorities 3
Property disposal 56
Publications 96
R
Radio 26
Recruitment 56
Regional Advisory Boards 40
Regional map 1
Regional safety plans 6
Renewable energy
- Biomass 29
- Carbon sequestration 30
- Cogeneration 30
- countrygreen TM energy 14
- Hydro electricity 29
- Partnerships 30-31
- Solar 29, 33
- Wind farms 29
Retail 12
Risk management 55
Rural Advisory Group 40
S
Safety
- Advertising campaigns 10
- Consultative committees 7
- Field Days 10
- Improvement Plan 6
- Incidents 7
- Investigations 7
- Motor vehicle 7
- OH & S Management
System 8
- Performance 6
- Public 9
- Safe Work Method 8
Statements
- Safety Sense 10
- The year ahead 10
Safety and environment
committee 54
Security 24
Service Milestone Awards 45
Shareholders 52
Smart metering 28
South Australia 13
Sponsorships 40-42
Statement by Members
of the Board 65
Statement of cash flows 68
Statement of financial
performance 66
Statement of financial
position 67
Strategy Statement 3
Supply reliability 20
Sustainability 2
T
Telecommunications
- Fibre Towns 25
- Broadband Powerline 25
- Voice over internet protocol 25
Training and development 47
Turnover rate 49
V
Vegetation management 23
Virtual operations service 23
centre
W
Waste management 33
Waste recycling 33
Website 14
Works Improvement Notice 7
Workers compensation 9
Workforce planning 48
99
COUNTRY ENERGY ANNUAL REPORT 2004–2005

Company details
100
Corporate offices
Bathurst
Cnr Littlebourne Street & Hampden Park Road
Kelso NSW 2795
Port Macquarie
8-10 Buller Street
Port Macquarie NSW 2444
Queanbeyan
Level 1, 30 Morisset Street
Queanbeyan NSW 2620
Regional offices
Albury
174 North Street
Bathurst
Cnr Littlebourne Street & Hampden Park Road
Dubbo
6/36 Darling Street
Grafton
122 Queen Street
Port Macquarie
8-10 Buller Street
Queanbeyan
30 Morisset Street
Tamworth
Electra Street
Wagga Wagga
58-87 Hammond Avenue
Business centres
Newcastle
Suite 7, Cooks Hill Commercial Centre
253 Darby Street
Cooks Hill NSW 2300
Sydney
Level 25, 44 Market Street
Sydney NSW 2000
Melbourne
Level 24, 360 Collins Street
Melbourne VIC 3000
Brisbane
Brisbane Club Tower
Level 19, 241 Adelaide Street
Brisbane QLD 4000
Customer service hours
24 hours a day, seven days a week
General enquiries
Telephone – 13 23 56
Supply interruptions
Telephone – 13 20 80
Facsimile
+61 2 6589 8695
Email
info@countryenergy.com.au
Website
www.countryenergy.com.au
Auditor
Auditor General of New South Wales
234 Sussex Street
Sydney NSW 2000
Freedom of information
(FOI) officer
PO Box 718
Queanbeyan NSW 2620
Telephone – 13 23 56
Facsimile – 02 6332 6812
Annual Report 2004-2005
This report was produced at a cost of $29,593.20
(GST inclusive).
For copies contact:
Country Energy
Corporate Affairs, Annual Report Mailout
PO Box 718
Queanbeyan NSW 2620
or visit www.countryenergy.com.au
Design – FIVEFOLD Creative
Production – Nicole Cook and Natalie Dowle
Photography – Thanks to employee Rob Smith for
the contribution of several personal photographs
COUNTRY ENERGY ANNUAL REPORT 2004–2005