MEPT Trustees Attended a conference of similar Trust Owned Distribution Companies in Wellington:
Below is a Summary of some of the speakers and Topics:
Megan Woods Minister for Energy and Resources:
Spoke about Decarbonisation, Distributive Energy Resources and predicted an exciting future for the energy sector.
A topical subject at the time was the low dam levels (hydro) and the high spot price being paid by businesses, as risk of a shortfall increased.
The NZ Govt target is to be carbon neutral for 2050, in order to meet that target regulations would be required, which should be in place by the end of 2021. (targeting objectives for 2035).
The Government will be encouraging innovation and new technology.
An additional $70m for research into the energy efficiency of boilers from coal to gas. etc.
Other topics :Pricing policy, Tree trimming regulations, more renewable generation, additionally
considering, in the future, an Energy regulator similar to UK.
Elena Trout EECA
EECA is Govt funded to deliver a clean and clever energy use.
Co funded 1100 EV chargers for electric cars. Also now looking at on street charging.
EDB Trusts have a good connection with customers and can affect the way they operate.
Anna Berka: Community Energy Project: See www.communityenergy.co.nz
Looking at EDB's for Local Projects that Increase Energy Efficiency use, including generation and retail by EDBs. Using the close link between EDBs and Local Power Users.
Jo Perry and Simon Todd: Commerce Commission.
Talked about performances of EDBs, airports, gas and Dairy sectors.
Stats Link to the site is via; https://comcom.govt.nz/
Additional Presentations were made in relation to local projects, and their benefits, being currently undertaken on by EDBs in NZ.
Spot market prices reducing Decarbonisation savings, due to business going back to use diesel
generators, when spot prices are so high.
The next conference will be held in Nov 2021.
28 May 2021 - Media Statement
Marlborough businesswomen Nicki Stretch has been appointed chair of the Marlborough Electric Power Trust.
Previously the Trust’s deputy chair, Mrs Stretch replaces Ian Martella who will remain as a trustee. The new deputy chair is Marlborough businessman Domenic Romano.
Mrs Stretch acknowledges the strong leadership from Mr Martella. “Ian led significant, positive changes during his term as chair. I look forward to working with new Marlborough Lines Chair Phil Robinson and CEO Tim Cosgrove to ensure that the company’s value is protected, enhanced and applied for the benefit of current and future beneficiaries”.
Trustees of the Marlborough Electric Power Trust hold all the shares of lines company Marlborough Lines on behalf of local power users.
Mr Martella, says “After four years chairing the Trust I felt it was a good time for Nicki to take the reins. Nicki’s background in governance, finance and business is well suited to the role and I look forward to continuing to work together”.
The changes took effect as of April 12, 2021.
For more information, contact: Nicki Stretch on 027 705 9109
This past financial year has been a challenging one for the Marlborough Electric Power Trust, chairman Ian Martella says.
The trust held its annual public meeting last night, to report back to power consumers in Marlborough on the year ending 30 June 2020. The trust owns 100 per cent of the shares in electricity lines company Marlborough Lines, on behalf of the power consumers of Marlborough.
Ian says the year was marked by uncertainty and stress for everyone, and this has adversely affected the Marlborough Lines Group’s performance.
MLL was not immune to the impacts and trading restrictions of COVID-19, with a reduction to some income lines, and an increase to operating costs, he says.
“MLL continues to operate effectively in a operationally sound manner, despite the lack of capital works undertaken this year because of COVID-19 restrictions.”
The impact of COVID-19 has carried through to YWG, Ian says, which has suffered in the international market, particularly with a reduction to higher-margin on-premise wine sales. YWG has also been subject to operational matters outside COVID-19, such as low harvest volumes and high capital expenditure, that have also negatively impacted YWG’s financial performance, resulting in no dividend being paid from YWG to MLL.
“YWG carried debt of $130.5 million at year end. The Trust views the debt balance of YWG as high, and not in proportion to the level of earnings it achieves. The Trust is supportive of the active steps that YWG is taking to reduce its debt balance and improve its liquidity position, including some recently completed vineyard sales.”
Because of the low cash returns received from MLL’s investments, the Trust requested only a $0.5m dividend from MLL. This is enough to fund the Trust’s running costs, Ian says, but will not enable the Trust to pay a distribution to beneficiaries in 2021.
“It is with regret that a distribution will not be available. MLL will however, continue to provide discounts directly to our beneficiary consumers, with a discount payment brought forward and paid in August 2020.
“MEPT is not happy with the cash return on investment achieved during the year. We are aware of issues and continue to seek advice, and to monitor the situation.”
He noted that in the case of YWG, the investment continues to grow from its original acquisition value of $122 million in 2015, to a net book value of $205 million in 2020.
From a shareholder’s perspective, the asset backing per share of MLL has increased from $1.51 per share in 1999, to $15.95 as at 30 June 2020. The value of net assets of the company attributable to the Trust has increased to $446.6 million, a small increase on last year’s value.
In the past weeks, YWG has sold four vineyards to the New Zealand Super Fund for $34m. The sale includes a long-term grape supply back to YWG.
On a personal note, Ian marked the passing of trustee Malcolm Aitken in July.
“Malcolm was a well-respected personality within the Marlborough community with a passion for all things Marlborough and doing the right thing. This extended to Malcolm’s duties as a trustee. His memory and the legacy of his contributions continue on and he has been sorely missed.”
He also acknowledged MLL board chair David Dew, who will retire on 31 March 2021.
“David has been with the Board for 19 years; it has been a remarkable tenure. During David’s time at MLL, the net asset backing per share has risen from $2.34 to today’s value of $15.95, this equates to an increase in the equity value of the company of $381m.
“The trust wishes to extend publicly its acknowledgement of David’s commitment and service to MLL and its subsidiaries and associates over the years.”
For more information, contact:
Marlborough Electric Power Trust chairman Ian Martella 027 229 9077
Trust Chairman Ian Martella Comments:
"Malcolm had been on the trust since September 2014, and we have really valued his input.
“He was a long-time Marlburian, moving here in 1960 with the air force, and then running a highly-successful restaurant business for 22 years, as well as being part of
many community organisations."
He says Mr Aitken had tendered his resignation due to health reasons in June and had since lost his battle with his illness.
The Marlborough Electric Power Trust holds all the shares of lines company Marlborough Lines and administers them on behalf of the power users of
Malcolm Aitken was re-elected to the trust in the election held in February 2020, and Mr Martella says that the trust has now appointed the highest-polling unsuccessful
candidate, Cathie Bell, to fill the position.
“Cathie has followed the trust’s work actively, attending all our public meetings and asking questions and we look forward to welcoming her to the team”.
Cathie Bell is a communications specialist, having worked in journalism, public relations, and in local and central government roles, and now owns her own
Contact: Marlborough Electric Power Trust chairman Ian Martella 027 229 9077
Notes from ETNZ Conference Wellington May 2019
The Trustees went to Autumn Conference of ETNZ and again there was a large range of topics to hear about and discuss.
There was a wide group of speakers from Politicians to Trust lawyers.
Alan Jenkins (ETNZ) was one of the first speakers and he has been in the industry a long time and is very knowledgeable. He mentioned that the new trust bill is nearing parliament sign off, and in it there is going to be more responsibilities on trustees with references to oversight, and information disclosure from their companies. Making the trusts more consumer focused. The Electricity Authority encourages, investments, spreading risks and diversification to protect the value for the beneficiaries, they are also after more power to regulate distribution networks.
Megan Woods, Minister of Energy
She talked about technology and low carbon. Transportation needs to move to low carbon, probably electric, and industry needs to do the same. She wants feedback from ETNZ on new technology and energy efficiency. Benefits from technology should work for all customers equally (not to leave the poor behind and benefit the wealthy). Don’t leave the poor paying most.
The Minister also discussed the use of Hydrogen (which can work well in remote areas) EVs may have a problem due to access power demand. Hydrogen has many possibilities especially heavy vehicles , trucks, buses and also trains. She made reference to the government Hydrogen strategy which is on a government web site.
Johnathon Young National MP
He spoke as well about Hydrogen, and his trip and observations in Europe.
Henri Brandts-Giesen: TRUSTEE LAWYER
He spoke about Trustee Reform.
The original act was1956, in 2013 the law commission recommended a review, 2017 the bill was submitted and it is still with parliament, but hopefully passed soon.
The review is about evolution not revolution.
It accepts that trustees can make mistakes, it is about the process trustees go through to make decisions.
Trustees must at a minimum operate to the following:
1. Have a Duty of Care.
2. Must have an understanding of the aim and objectives of the trust.
3. Act honestly and in good faith to the beneficiaries.
4. Do not exercise powers for own benefit.
5. Do not bind to future for own benefit, act for today.
6. Avoid conflicts of interest.
7. Act unanimously.
This was a very busy and informative conference and the highlights are from a few of the speakers.
Marlborough Lines pays a dividend to the Marlborough Electric Power Trust (MEPT) and the MEPT then determines an amount to be paid to each of its beneficiaries (the ICPs connected to the Marlborough Lines network). The qualifying date for this is currently around mid-January each year. The ICP must be actively connected and not vacant at the qualification date. The distribution is paid to all ICPs, including those in remote areas.
It is paid as a credit to your electricity account that your retailer provides. The amount is expected to show up in your February invoice. If you are selling your house you may want to consider making some form of arrangement in your sale and purchase agreement to include this. However, note that the amount is not confirmed until January.
The 2020 Distribution amount is $200 per beneficiary, with a qualifying date of 20th January 2020.
The forecast distribution amount for 2019 was stated in the Marlborough Lines annual report to be $200. After considering the trusts tax position, and allowing for the increase in power account holders, the final amount has been resolved at $185.00, with a qualifying date of 21 January 2019.
The 2018 distribution amount was $180 per beneficiary with a qualifying date of 22nd January 2018. The 2017 distribution amount was $150, while distributions of $50 per beneficiary were also made from 2011 – 2016.
Marlborough Lines does not have complete information on who occupies each installation during the year and therefore cannot allocate the amount of discount to different occupiers.
The Trust distribution is paid to the occupier of the installation at the date of qualification. It is similar to that of a dividend of a normal shareholder in that it is paid to the holder of that share at a certain point in time. Previous occupancy doesn't entitle the previous owner to this distribution.
Marlborough Lines is bound by regulation to operate as a successful business, as such part of operating as a successful business is that it must make profit. In turn Marlborough Lines either re-invests the profit back into the company or distributes it to the beneficiaries as a tax-free discount off their power account. Traditionally this happens every year however the amount can vary. Discounts only go to those beneficiaries that live within the economic zone.
John Cuddon has retired from the Marlborough Power Trust after serving 38 years. He became interested in the electricity industry in 1980 when he joined the Marlborough Electric Power Board in 1980. The board was involved in both power reticulation and generation having built and operated the Waihopai Dam and later the Branch River hydro scheme.
The Marlborough Electric Power Trust was formed in 1993 but John was on the interim trust in 1990 and continued as a trustee after the power board became Marlborough Lines, becoming chairman of the board of trustees on the 28th April 1993. He has served continually as a Director or Trustee since then.
Marlborough Lines now operates and maintains the provinces lines network.
John is very proud of how successful Marlborough Lines is, it was during the time the trust was being set up and directly after, that firm leadership was needed.
The trust deed states there are 6 elected trustees, three of who are elected on a two-year rotational basis, John's standing in the community can be measured by the fact that when he stood for every election he was the highest polling candidate.
The Trust Deed Review has been completed, the amendments made as per the proposal and the revised Trust Deed dated 12 June 2018 are now available
See our Trust Deed page
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.