Russell Shaw, chief executive of Top Energy, has overseen the transformation of the company from one with a lines network exhibiting one of the worst reliability performances in the country into a mature and active industry participant that has performed exceptionally well against a number of key measures in the past few years.
After poor performance in the 2008/2009 year Russell mandated the launch of an "aggressive" transformation process. Change, he told his board and staff, was necessary to arrest declining financial and operational performance and avoid likely job losses.
Russell began with the Energy Value Chain Strategy. This strategy sought to maximise value across the Top Energy group of operating companies, which comprise the core lines business, Ngawha Generation, Top Energy Transmission, Top Energy Contracting, Top Energy Electrical and the Phone Plus call-centre business.
The approach led to the identification of where investment was needed and what new technologies or alternative solutions could be used to solve ongoing problems. It also saw the divestment of assets that were not adding to the value chain, resulting in the sale of Top Energy's Fiji operations in 2011.
Russell saw the need to significantly improve network performance as the major priority. A $260 million 10-year network development and communications plan (TE2020) was developed identifying a number of network and non-network solutions that could improve the network's overall performance.
He also identified safety and training as a key focus for the business, and has personally driven the development of policies and standards to ensure the company and its employees have the mandate and resources to complete their jobs safely.
Safety focus
In the past five years, Top's lost time injury (LTI) numbers had peaked at 16. The implementation of Russell's safety initiative has seen that number reduced to just two LTIs in the past year. Measures taken have included regular onsite safety audits by managers, incentive-based near-miss reporting and the highlighting of safety in the company newsletter.
The company's crews now participate in the ESITO lines competition to benchmark their skills, and Top was an early accreditee to the Public Safety Management System. Top Energy was last year awarded the Electricity Engineers' Association Workplace Safety Award for its efforts in that space.
Improved processes and Top's clearly defined strategy are now being matched by a significant investment in the network to meet the region's long-term energy demands.
Russell led the two-year negotiation to buy Transpower's transmission assets in the far north for $6 million, avoiding a network spend of up to $10 million and providing key assets for the network's longer-term redevelopment.
The company is piloting the use of solar panels combined with battery storage to provide local grid support during periods of peak demand. It has also installed diesel backup generators in remote areas to improve restoration times and defer spending of up to $15 million.
Achieving that level of spend has also involved innovative funding and a focus on savings. Bank lending facilities were almost doubled and a new long-term agreement was made with suppliers, which is expected to save $15 million over the 10-year programme.
A complex pricing structure was also put together, combining capital releases from property, cross-funding from another division and a price increase to customers.
The availability of the Ngawha geothermal plant was also improved, while a unique emissions factor secured for the plant is also saving about $1.6 million a year. An innovative waste handling policy has also reduced the volume of mineral waste being removed from the site, saving about $300,000 annually.
Russell's efforts across that broad range of fronts are paying off in both higher operating earnings and improved reliability.
Top's EBITDAF rose 13 per cent in the period under review - the third straight increase and 10 per cent higher than budgeted.
And despite a year of extreme weather events, time lost to outages was down a touch on the previous year, and is now less than half the levels recorded in 2009. In the 2013 financial year so far, monthly interruptions are trending at 10 SAIDI minutes - the best performance for more than 15 years.
The Energy Executive of the Year award is sponsored by Transfield Worley.