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Unison Delivers Solid Performance in 2015/16

Electricity distributor Unison Networks has performed well for its customers, delivering network performance well below regulatory limits and reporting an increased dividend to its shareholder, the Hawke’s Bay Power Consumers Trust.

Unison Chairman, Kevin Atkinson said the result was very pleasing, despite a decline in the after tax profit this year.

“The Group’s result was impacted by unfavourable valuation movements on financial instruments, which is being driven by the prevailing record low global interest rate environment.”

“Even in the face of this, combined with the unprecedented rate of change within the industry, with emerging technologies and increasing customer choice altering the energy landscape, Unison remains committed to meeting and exceeding customer needs.

“The Company’s smart network strategy, now that it’s fully implemented, is enabling enhanced performance, without increased network investment, as well as delivering on its promise of providing a sound platform from which the network can be evolved to meet customers’ changing needs.”

With Unison’s real-time network control operating platform (the Advanced Distribution Management System) now fully embedded and smart technologies deployed across the network, the benefits of this are now being realised.

“This technology is enabling us to improve the utilisation of existing assets and extend their lives which, in turn, will reduce the amount we have to invest in new and replacement assets.”

In line with the Electricity Authority’s directive that distributors transition towards ‘service-based’ charges, Unison is committed to providing clear price signals on the real costs and benefits of new energy technologies such as solar PV panels, batteries and electric vehicles to ensure fairness for all customers it serves.

This is reflective in the Company’s recent introduction of a price category for customers with solar panels connected to Unison’s network, which was initiated to address unfairness between customers with and without solar.

“Whilst we appreciate customers installing solar panels would have preferred Unison to continue with large subsidies on their lines charges, as highlighted in Australia, such subsidies can quickly become unsustainable, and of significant detriment to those consumers without solar panels.”

He also noted it was clear, however, that legacy pricing approaches and out-dated legislation perpetrating them needed significant reform. 

“Unison is actively participating in industry-wide processes, to establish optimal pricing approaches that will harness the power of smart meters to better reflect the fixed infrastructure costs of our network services.  Over the next twelve months we will be consulting with our stakeholders on how we implement further changes, as it has become clear there is significant interest in this topic.”

Mr Atkinson said the Board was also pleased to note Unison’s subsidiary businesses Unison Fibre Limited and Unison Contracting Services Limited had delivered a positive result during the reporting period.

“Unison Fibre Limited’s customer connection volumes continued to strengthen, whilst Unison Contracting Services Limited finished the year with no serious harm incidents or lost time injuries.”

Hawke’s Bay Power Consumers’ Trust Chairman, John Newland, said the Company’s performance met targets set by the Trust.

“Year on year, Unison succeeds in meeting or exceeding the network performance targets set for them by the Trust.

“It is pleasing to witness Unison’s ongoing commitment to operating a sustainable business, whilst delivering a reliable and high quality service to the consumers of Hawke’s Bay.”

Unison Chief Executive, Ken Sutherland, said in 2015/16, Unison remained focussed on its purpose of delivering a service so customers could do the things that were important to them.

“As the environment is changing around us, we are not standing still, we are changing with it.

“We have researched and trialled a range of technologies and used this knowledge to provide balanced advice, fair pricing structures, and access to information so customers can make a true evaluation of the investments they are considering, and so all customers relying on our service are treated fairly.”

He said Unison continued on its journey to adapt from being a traditional electricity distribution business, to one with a breadth and depth of capability in asset management to improve the efficiency of its business, whilst delivering a high quality service to its customers.

“We continue to embrace technology and use it to adjust and adapt as the energy future crystallises.  Future-proofing our network through advanced data analytics and automation is re-inventing our traditional electricity distribution business into a next-generation version – and this remains the cornerstone of our Smart Network strategy.” 

Key Highlights:

Total Group Revenue - $213.5m

Net Profit After Tax - $24.6m

Capital Expenditure - $55.2m

Equity/Total Assets - 49.5%

Dividend declared - $9.683m
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