PowerCo

Finalist
2012

Powerco had another strong year, increasing earnings while also meeting its regulated reliability thresholds despite two major storm events.

The company, operator of the country's largest electricity network and the second-largest gas pipelines business, increased its net profit by 9 per cent in the nine months to March 31. Excluding mark-to-market adjustments, profit jumped 34 per cent to $31.5 million.

And the company says it can achieve those sorts of returns because of the scale efficiencies available to it and the operating gains it has achieved running both gas and electricity businesses.

In the 2011 disclosure year, Powerco operated 28.3 cents of assets for every kilowatt-hour of electricity it delivered, compared with an industry average of 30.8 cents. And its operating expenditure of about $2,000/km was almost a third lower than the industry average.

Powerco says its job is to keep the lights on for the communities it serves. And with a large, ageing network, much of it in remote rural or coastal areas, that can be a challenge.

In March this year, severe storms disrupted supplies to about 30,000 customers in Wanganui and South Taranaki. More than 600 high- and low-voltage lines were brought down, 76 poles needed replacing and 56 kilometres of conductor were restrung.

Powerco mobilised more than 200 staff and contractors, with supply to 85 per cent of customers restored within 24 hours and to 99 per cent within five days. Despite that event, Powerco's average interruption duration index for 2012 was 209.85, also within the assessed limit of 210.10.

Heavy snow in August 2011 brought down lines, with road closures adding further delay to restoration efforts.

Powerco says the company's response reflects its comprehensive event planning and the large resource pool it can access due to the scale of the business.

But the company is always focused on prevention and in the past year it launched a campaign to reduce tree-fall in rural areas, a major contributor to line damage. For each trimming that a rural customer paid for, Powerco donated $100 to a school chosen by the customer, who also went into a draw to win a chainsaw and a quad bike.

The company is also employing new technology and systems to extend the life of assets and optimise the timing of maintenance and renewal work. Maintenance management processes are being automated, while the company is also implementing low-voltage transformer metering for dynamic load and temperature monitoring to reduce uncertainties around replacement.

In the nine months to March, Powerco invested almost $70 million in capital expenditure work and more than $26 million in maintenance on its gas and electricity networks. Among the major undertakings during the period, the company completed an upgrade of the Tawa Gas Station, the primary supply point for the Wellington region. The project improved the reliability of the supply and has also increased capacity to meet future demand. The work was also completed without interrupting supply to Wellington.

Another major project was the commissioning of a new distribution line in the Coromandel in November - the result of seven years of planning and development. The line is currently operating at 66,000 volts but is capable of carrying up to 110,000 volts to accommodate forecast growth in the area.

The project will provide a more reliable supply and give Powerco more flexibility in the way it operates the network in the region. The 'live' commissioning of the asset, in order to avoid extended power cuts in the region, also involved one of the largest installations of portable generators at a single location on any network throughout the country.

But innovation by Powerco is not limited to construction and maintenance of the company's hard assets. In the past year the company also implemented a combined billing and ICP management project to reduce historic errors in the existing processes and set the company up for future industry developments.

The new system, unique in the energy distribution sector, puts data processing together with a wealth of other company information in a fully integrated system that can be accessed through a single web-based portal.

The Lines Company of the Year Award category is sponsored by TE Connectivity.