The latest letter from ETNZ showed that earlier this year the Audit Office did a detailed review of electricity distribution governance.
The key comments and conclusions are stated:
We have not identified any significant concerns with the financial health of electricity distribution businesses as a whole. The core distribution business is profitable. More widely, electricity distribution businesses have provided double-digit profits and dividends and discounts as a proportion of income in each financial year since 2011/12. Electricity distribution businesses have relatively low levels of debt, which means that they have the financial flexibility to respond to unexpected changes in the short term.
Electricity distribution businesses as a whole continue to invest in their networks throughout the country. The level of investment means that the electricity distribution businesses are maintaining the average age of the networks, which should help to provide a reliable supply of electricity to consumers in the future.
Other findings are:
Governance practices are a focus of our annual audits of financial statements. We have previously reported that our annual audits did not identify any significant governance issues in electricity businesses.
The price controlled income of EDBs increased by 19% over the 4 years to 2015/16and “This was to reflect price increases from Transpower Limited and to cover the cost of reinvestment in the core business, such as to accommodate growth in customers.”
“Trust-owned companies ‘ net debt was low, about 22% of total assets by 2015/16. In
This statement has proven that Marlborough Lines is a
The trustees were taken on a day trip to see some of the lines and assets of the Marlborough Lines Co.
This demonstrated the way they supply power to ICPs in the sounds, and how they manage to maintain and repair any damage as it occurs in such difficult terrain. As you are aware the way the weather is in the sounds the Co has to have all systems maintained to a very high standard, so any outages are repaired as quickly as possible, they have generators on standby, located at strategic points and if an outage occurs they can be activated remotely from the Operations Centre in Blenheim.
The next part of the tour was inspecting the substations around Blenheim, the Co has a policy that these substations blend in with surrounding areas, the stations we saw you could not differentiate between them and their neighbours. The Transformers in the substations are all modern and very efficient and with duplication in each one, if there is an outage in one area the other transformers can take over the extra load.
We next went the Operations Centre, and there we saw a highly technical operation that is very efficient, it is so up to date other Lines Companies are visiting to learn the systems. They have the ability to monitor where their staff are working, for safety reasons, and where the faults are so they can send staff to the exact location as promptly as possible.
The last visit of the day we went to the workshop yard in Maxwell Road and saw all the equipment and vehicles that keep the Co running, they are all modern and kept to a very high standard of readiness, we were told they have to be ready for any emergencies, and react promptly without any hitches as was proven when the Earthquake struck.
Annual Public Meeting:
21st December, 10am, at St John’s Building, 93 Seymour St, Blenheim
Trustees are pleased to announce that the distribution will be increased from $150 in January 2017 to $180 in January 2018.
Ian Martella, New Trust Chairman.
After many years as Chairman of the trust Ross Inder has handed the role over to Ian Martella, which has been part of a trust succession plan. Ross had now taken on the roll as Vice Chairman, to give Ian support when required.
Ian thanked Ross for his leadership for many years, and particularly his work in ensuring the trust and the company work to together in achieving our objectives.
May Conference for Electricity Trusts of New Zealand.
Held in Wellington, the conference covers a variety of topics relating to the Electricity Distribution Sector, and our role as trustees, ensuring Marlborough Lines Limited runs as a successful business. Three areas of particular interest were:
• The political pressures affecting Electricity Distribution Companies.
• How climate change will impact on lines company assets and insurance.
• The increasing uptake of new technologies in regard to electricity generation and storage
Every year Marlborough Lines Limited produces a Statement of Corporate Intent which is reviewed by Trustees. We will be asking the Directors to consider these points as they plan for the future of the Company.
Marlborough Electric Power Trust is pleased to be able to distribute to Marlborough Lines Consumers (Beneficiaries) $150 per connection, up from $50 per connection in 2016. This $100 increase reflects the increased returns from the purchase of Yealands Wine in 2015.
Payments should be credited to February 2017 power accounts.
Additional Discounts from Marlborough Lines Limited should be credited separately in your March 2017 accounts.
The trust has resolved to re-appoint current directors David Dew and Tim Smit for an additional term.
Annual Reporting Meeting:
The annual reporting meeting took place on 20.1.17, it was pleasing to see so many attendees, far more than in previous years.
A report on the year from a trust point of view was given by Chairman Ross Inder, and David Dew, MLL board chairman, gave an overview of the performance of the company and its investments.
There were some robust questions and points of view, along with some positive points to consider given by attending beneficiaries.
Overall the trust is pleased with the company performance for 2015/16.
ETNZ (Energy Trusts of NZ) Conference 31st May 2016.
Trustees attended the Winter conference at Wellington. Presentations by specialist speakers were given on such subjects as New Technology (Electric cars, solar, and latest battery storage), The Smart Grid, Cyber Security ( A major threat to many companies presently) and by the Auditor General’s office.
These conferences keep trustees informed of their obligations along with threats and opportunities that are arising in the electricity sectors, particularly with new technologies.
Change to End of Financial Year date and MEPT Distribution payments.
With the recent purchase of Yealands Wine, the company and trust have had to apply for a change to the end of financial year date, of MLL, to bring the two companies together. The date has moved back from 31 March 2016 to 30 June 2016 ( 3 months). As a result the distribution of $50, normally credited to consumers December power accounts, is to be moved back to be paid in early 2017. The dividend from the company to the trust has to be held by the trust for 6 months so that it can be distributed tax free to all customers. The provisional amount per ICP is anticipated to be up from $50 to $150 in 2017.
The trustee elections were held in March 2016. 4 trustee positions were up for election, there were eleven applicants. The results were:
CUDDON, John 4,800
STRETCH, Nicki 3,716
AITKEN, Malcolm 3,690
INDER, Ross 3,351
HAM, Paul 3,218
ROMANO, Dominic 2,784
WALKER, Janette 2,527
TAYLOR, David 1,854
O'BRIEN, John 1,636
DUTT, Sushee 1,112
BELL, Cathie 1,106
INFORMAL 19 BLANK VOTING PAPERS 6
The trustees would like to welcome Nicki Stretch onto the trust, and would also like to thank Paul Ham for his long and diligent service to the trust.
Omaka Heritage Museum
The MEPT has funded the free entry of Marlborough School pupils to attend the museum, this has so far been taken up nearly 2000 Marlborough Schools pupils, and helps promote this ‘world standard’ facility and helps to increase and promote attendance.
Marlborough Lines Buys 80% stake in Yealand Wines:
Marlborough Lines (MLL) has invested in the purchase of an 80% stake in Marlborough wine maker Yealand Wines.
This investment was made using the some of the profit made from the sale of Otagonet earlier in 2015.
The existing board members of Yealands wine presently remain in place for continuity of control and direction, with 2 additional directors from MLL.
This investment is seen by the trustees as a good for both todays beneficiaries, and those in the future (which is a condition of the trust deed). Beneficiaries should see a significant increase in their dividends over the coming years. This purchase also follows the path of MLL being run as a successful business (again a trust deed requirement)
Investment in the ‘regulated’ electricity market is now showing signs of risk, due to reduced consumption and alternative power sources, and the reduction of returns allowed by the commerce commission.
The trust sought its own advice during the purchase and the results corresponded with that of MLL’s due diligence, that the purchase was sound.
Marlborough Lines Ltd has sold its investment in Otagonet and has reported a healthy profit from the sale. The trustees have mandated the company directors with considering investment opportunities that would maintain the existing rate of return or better, and also grow the value of the company. Whilst options are being considered part of the money has been used to pay off debt and the remainder has been invested.
ETNZ (Energy Trusts of NZ): Trustees will be attending the bi-annual conference in Wellington in May, topics on the agenda include: Government Relations, Smart Networks, Trust Law and a Market Update. Trustees are kept up to date on emerging technologies that could also affect the lines companies business.
Discounts were paid by MLL into March accounts and again this year. Beneficiaries should receive around a $50 pre Christmas 2015 distribution from the Trust.
Moving Home: Don’t forget to talk to your solicitor about the allocation of MLL discounts, discounts are allocated to the person connected to the network on the day of the allocation in March.