Appendix: Background information on the three companies we considered

Managing the assets that distribute electricity.

Alpine Energy Limited

Alpine has a mixed ownership model of trust and local authority shareholdings. LineTrust South Canterbury (LineTrust) owns 40% of Alpine and represents consumers in the district of the former South Canterbury Electric Power Board. The remaining 60% is owned by three local authorities (Timaru District Council, 47.5%; Waimate District Council, 7.5%; and Mackenzie District Council, 5.0%). LineTrust pays 90% of its annual dividend to consumers.

Alpine has a wholly owned subsidiary, NETcon Limited (NETcon), which maintains the Alpine network. NETcon, in turn, owns Infratec Limited (Infratec), which specialises in end-to-end renewable energy. The same board of directors oversees Alpine and NETcon, and the Infratec board is made up of three Alpine board directors. Alpine also has investments in several smaller entities, including On Metering Limited (50% ownership), Rockgas Timaru Limited (50% ownership), and SmartCo Limited (14% ownership).

Alpine has a total workforce of 183 staff, 103 of whom are employed by NETcon. NETcon is the preferred supplier for maintenance and some replacement jobs. Alpine has recently restructured its network department, which specialises in key asset management tasks. Fourteen new staff have been appointed and, when we visited, there were new roles that still needed to be filled. Alpine has selected an enterprise-wide asset and financial management system to replace their current systems.

Unison Networks Limited

Unison is owned by the Hawke's Bay Power Consumers' Trust. The trust organises a return to consumers through yearly distributions and pays this out of the dividend received from Unison.

Unison has four wholly owned subsidiary companies: Unison Contracting Services Limited (UCSL), ETEL Limited (ETEL), Unison Insurance Limited, and Unison Fibre Limited. UCSL provides specialist contracting services, mainly to Unison. ETEL is a company that manufactures transformers. Unison has obtained services from ETEL in purchasing transformers and producing a transformer with higher specifications.

Unison employs 142 staff and UCSL, its wholly owned subsidiary, employs 220 staff. Unison employs a number of asset management specialists and also has business analysts heavily involved in asset management. UCSL carries out all maintenance work. To assist in planning, Unison is supplying UCSL with a three-year rolling maintenance job schedule.

Waipa Networks Limited

Waipa is owned by the Waipa Networks Trust. The company provides a discount to customers through six-monthly distributions. Waipa makes the distribution on behalf of its owner, Waipa Networks Trust.

Waipa does not own any subsidiaries but has recently invested substantially, through Waikato Networks Limited, in Ultrafast Fibre Limited. Waipa's investment was $30.5 million as at 31 March 2016.

Waipa has 57 staff, who carry out most network asset management activities, network maintenance, and vegetation control. There have been recent changes in the senior management team, with the appointment of a new chief executive and a network manager.

As a smaller network, Waipa makes a greater use of external resources:

  • Waipa's call centre is in Blenheim, and it outsources control room operations to WEL Networks Limited in Hamilton.
  • Design services and major projects, such as the recently completed $20 million 110kV transmission line, are outsourced.
  • Historically, Waipa has used contractors to collect asset condition data.