Meridian Energy Limited · NZX:MEL
Meridian Energy — Investor Day (April 2015)
97 slides from Meridian Energy's investor day presentation, Apr 30, 2015
Slide 1: Meridian Energy Limited Investor Day Presentation
MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015
Slide 2: Disclaimer
Disclaimer The information in this presentation was prepared by Meridian Energy with due care and attention. However, the information is supplied in summary form and is therefore not necessarily complete, and no representation is made as to the accuracy, completeness or reliability of the informatio
Slide 3: Introduction
Introduction Mark Binns MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015
Slide 4: Today's Presentation
Today’s Presentation Update on market dynamics, regulatory and technology changes Key aspects of Meridian’s business Overview of governance post listing Covering: Demand and Supply Transmission Pricing Water Reform New Energy Technology Strategic Asset Management Future Generation Options Retail Rem
Slide 5: Meridian Attendees
Meridian Attendees Mark Binns Neal Barclay Paul Chambers Jacqui Cleland Alan McCauley Chief Executive General Manager, Chief Financial Officer General Manager, General Manager, Retail Markets and Production Human Resources Jason Stein Guy Waipara Owen Hackston Chris More Gillian Blythe Grant Telfar Ja
Slide 6: Topical Subjects
Topical Subjects March 2015 was our fourth consecutive PUKAKI HYDRO STORAGE (29 APR 2015) GWh 2,000 month of below average inflows Sufficient inflows to maintain reasonable 1,500 generation and stabilise storage 1,000 Good inflows over the last few days 500 Good supply of thermal generation in the 0 mark
Slide 7: Observations on the Market
Observations on the Market New Zealand market is performing well by international standards More rational cross-party political views Highly competitive environment is unlikely to change Market is getting its mind around the implications of possible Tiwai Point decisions MERIDIAN ENERGY LIMITED INVE
Slide 8: Demand and Supply
Demand and Supply Paul Chambers MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015
Slide 9: Modelling National Demand for Electricity
Modelling National Demand for Electricity Meridian maintains its own demand model This model uses GDP, population, households, retail price as its key variables It shows a very close fit to the last 10 years of history (including recent flat demand) Source: Meridian MERIDIAN ENERGY LIMITED INVESTOR DA
Slide 10: New Zealand Electricity Demand
New Zealand Electricity Demand 12 MONTH GEOGRAPHIC DEMAND GROWTH Demand in the last 12 months is 2.1% higher than the preceding 12 months +3.4% We have seen growth in nearly all regions +2.2% Provincial New Zealand has led this +0.9% +3.1% growth +7.1% +4.4% -1.2% +1.1% -2.7% +0.1% Source: Transpowe
Slide 11: Provincial New Zealand
Provincial New Zealand Agricultural demand has grown most CANTERBURY DEMAND (EXCL CHRISTCHURCH) TWh strongly 2,000 +7.2% +6.9% +2.3% The dairy value chain is a more intensive 1,500 user of electricity 1,000 +18.7% Some growth is weather driven (Q1) 500 We are seeing a genuine underlying 0 increase i
Slide 12: Urban New Zealand
Urban New Zealand AUCKLAND DEMAND Low housing growth combined with TWh 10,000 -1.3% +1.5% increasing energy efficiency has -1.4% depressed urban regional growth in 8,000 recent years 6,000 With positive net migration and GDP 4,000 +2.6% growth we are seeing renewed growth in 2,000 (Q1) all urban areas
Slide 13: Sector View of Demand - Industrial
Sector View of Demand - Industrial Low overall demand growth over recent #(""" years #&""" #%""" Mostly driven by reduction in the #$""" #"""" industrial sector (""" &""" Some one-off shocks %""" $""" Wood, pulp, paper and printing being #)'% #)'& #)'( #)(" #)($ #)(% #)(& #)(( #))" #))$ #))% #))& #))
Slide 14: Residential Demand Influencers
Residential Demand Influencers Population NZ’s population was 4.4m (2012) Will increase to 5.4m in 2036 and to 6.0m in 2061 Technology/lighting/ Driven by efficiency improvements water heating Solar PV Small impact relative to overseas Electric vehicles Positive impact but will take time to reach noti
Slide 15: Future Demand
Future Demand Forecast growth in New Zealand GDP and population underpin continuation of New Zealand Real GDP and Population Projections the link to growth in electricity demand ! Expect growth to be lower than seen historically !!! " This has clear implications for new generation ! ! ! ! ! ! ! ! "!
Slide 16: Unit Cost Comparisons – Generic NZ Generation
Unit Cost Comparisons – Generic NZ Generation New Zealand’s energy future will be predominately renewable led +2..9 +02.9 +02.9 +13.9 0.. '2.8 #'338 & & ( ( /5. /4. /2. /0. 0'+3.( /.. 0'+03( 5. ) 4. " 2. 0. . '$! $ ! (% # ' ( Source: Meridian MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 Apri
Slide 17: Supply Perspective: Surplus Thermal Generation Capacity
Supply Perspective Surplus Thermal Generation Capacity New Zealand is not capacity constrained 16 40% 14 35% Surplus thermal capacity / Demand Energy balance has always been the 12 30% dominant driver of New Zealand’s 10 25% TWh pa investment 8 20% 6 15% Well signalled closure of thermal plant 4 10%
Slide 18: Transmission Pricing
Transmission Pricing Guy Waipara MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015
Slide 19: Market Reform
Market Reform Transmission pricing review is one of many reforms underway by the Electricity Authority Wholesale Reserves and frequency management Spot market review Hedge market development Retail Price change announcements Long term benefit of consumers Saves and winbacks Competition Consumption da
Slide 20: Transpower's Annual Transmission Charges
Transpower’s Annual Transmission Charges Around $950m per annum Transpower's Annual Transmission Charges Charges are recovered from market Connection participants in various ways assets, $150m HVDC assets, Who pays? $150m HVAC assets, $650m HVAC assets paid for by distributors and directly connected
Slide 21: Current Transmission Pricing Methodology
Current Transmission Pricing Methodology Different perspectives on what the problem is, or whether there is one Perspectives can be driven by commercial interest Meridian’s view is that the core issue relates to HVDC pricing TPM does not align HVDC pricing with who pays and who benefits Other misalign
Slide 22: HVDC Pricing
HVDC Pricing MERIDIAN'S HVDC COSTS HVDC charges of $150m per annum $M 120 are paid for by South Island generators 100 80 Meridian’s annual charge has grown to 60 $100m per annum 40 These charges are not recoverable in 20 the competitive market 0 2010 2011 2012 2013 2014 Meridian’s view is that all p
Slide 23: The Process for Change
The Process for Change The EA’s review is still in process Options paper delayed until June Final issues paper by the end of this year EA are working hard to ensure their proposals are robust Apr-15 May Jun Jul Aug Sep Oct Nov Dec Jan-16 Feb Options paper 2nd issues paper Meridian expects to see: Po
Slide 24: Water Reform
Water Reform Guy Waipara MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015
Slide 25: Water Reform and Management
Water Reform and Management Water use in the Waitaki and Waiau catchments account for almost 90% of Meridian’s annual NZ generation Resource consents for both catchments require renewal in 2025 and 2031 respectively Involved in shaping water management at a national policy level and in catchments wh
Slide 26: Iwi Rights and Interests
Iwi Rights and Interests Government is engaged in discussions with Iwi Leaders Freshwater Group on iwi rights and interests in fresh water Government has recognised iwi do have rights and interests in fresh water Government has also announced their view is that no one owns water Meridian expects to
Slide 27: The Waitaki Catchment
The Waitaki Catchment Waitaki catchment has a water allocation plan (WAP), developed in 2006 While Meridian’s consents require renewal in 2025, stakeholders expect the WAP will form the basis of renewal Key points in the WAP are: Minimum flows on the Waitaki river Access to emergency storage in Lake
Slide 28: New Energy Technology
New Energy Technology Grant Telfar MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015
Slide 29: New Energy Technology Introduction
New Energy Technology Introduction Meridian is not a tech company – so can add little to the discussion surrounding technical details of the multitude of new and exciting technologies that are currently dominating headlines Meridian does have a significant role to play in understanding and explaining
Slide 30: MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015
MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015 30
Slide 31: Meridian and Solar PV
Meridian and Solar PV Tariff revision complete Total MW NZ solar ICP's installed RES SME ICP's Industrial Commercial Total MW's Meridian ICP's Meridian’s tariff continues to be 6000 25 100% 90% one of the more attractive buy 5000 20 80% back rates 4000 70% 60% 15 50% Installation rate post change has
Slide 32: Solar PV Changes Grid Level Demand Growth
Solar PV Changes Grid Level Demand Growth The growth in annual demand for Underlying Grid Demand Growth and PV Impact energy from the grid falls significantly if large quantities of PV are installed over time For example: By 3TWh* for 1 million rooftops By 6TWh* for 2 million rooftops But incremental
Slide 33: Solar PV Changes Grid Level Demand Profile
Solar PV Changes Grid Level Demand Profile The daily profile of demand that is Mid Summer Solar Output effectively removed at the grid level $"&% #"""""" may become significant at times – *### $##/ ,#/ especially in summer )### ) )! +#/ (### Residual system load is peakier *#/ )#/ ! '### (especially in
Slide 34: Electric Vehicles in New Zealand
Electric Vehicles in New Zealand Early days Cumulative light electric and plugin hybrid registrations Anecdotally, 548 electric vehicles Used electric New electric Plugin hybrid (EVs) in New Zealand at end of March 500 2015 400 More than 50 public charging stations 300 EVs offer an opportunity to tra
Slide 35: Electric Vehicles Changes Demand Growth
Electric Vehicles Changes Demand Growth The growth in annual demand for Underlying Demand Growth and EV Impact energy from the grid increases significantly if large quantities of BEV1 replace ICE2 requirements For example: By 4.8TWh* for 2 million vehicles By 8TWh* for 3.3 million vehicles Bolstering
Slide 36: Electric Vehicles Changes Demand Profile
Electric Vehicles Changes Demand Profile Travel patterns are strongly diurnal – EV Charging and Peak Load but BEV1 charging may be an end of "!$# " day issue, a “charge as you go” issue, %$$$$ a combination of both, or ... +$$$ The daily profile of charging demand )$$$ added to the system is the key
Slide 37: Solar and Electric Vehicles A 'Green Revolution'
Solar and Electric Vehicles A ‘Green Revolution’ We examine a future where: Mid Summer Weekly Generation Profile #"%$ Carbon prices are high at $100/t %$$$$ 3.3M BEV1 charging daily *$$$ 2M rooftop PV units )$$$ Huntly retires – not viable ! ($$$ The New Zealand power system &$$$ shows remarkable res
Slide 38: Batteries Domestic Energy Storage
Batteries Domestic Energy Storage Very early days Future is intrinsically linked to EVs Interest due to: Enabling consumers to go off-grid entirely Helping customers avoid peak pricing Reducing injection back into the grid for solar PV Increased household resilience Lines network management MERIDIAN
Slide 39: Battery Storage An Off-Grid Revolution?
Battery Storage An Off-Grid Revolution? Household Off-Grid Costs Economics are mostly unattractive: Day-time consumption 25% Going off-grid: PV + battery system No Seasonality Solar PV Battery Total would cost > $100K for an average Installation kW 7.4 5.5 home Cost $/kW $3,333 $4,000 Avoiding peak pr
Slide 40: Battery Storage Low Value in the NZ System?
Battery Storage Low Value in the NZ System? New Zealand has a significant System Value of Battery Storage amount of grid storage within the existing power system: $ Thermal 4.8 TWh – monthly " Reservoirs 4TWh – monthly Smaller lakes – weekly $ " Headponds – daily Domestic battery storage will do litt
Slide 41: Strategic Asset Management
Strategic Asset Management Neal Barclay MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015
Slide 42: "Safety is for Keeps"
“Safety is for Keeps” Lag indicators are mildly interesting at best Meridian is focused on Fatal Risks Building further on our cultural programme Working with the industry through Staylive Forum Health and Safety Framework has been externally tested against the new Health and Safety Reform Bill MERI
Slide 43: Waitaki Refurbishment
Waitaki Refurbishment Total cost around $35m ($10m better than planned) Site work from March 2013 to June 2017 Work completed to date: Unit protection and fire suppression Uupgrade of station cranes Repairs to sluice structure River bank erosion protection Unit 3 re-commissioning in progress In the d
Slide 44: Waitaki Refurbishment
Waitaki Refurbishment Dam structural safety evaluation works are still in design Scope includes: Inundation protection of the Hornell Gallery Manifolding and upgrading of the uplift drainage system Enhance uplift drainage on the left abutment dam blocks MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTAT
Slide 45: Manapouri Transformers
Manapouri Transformers Replaced all HV bushings on all seven main unit transformers in FY14 to address hairline cracks During replacement, discovered oil coolers were failing, causing aluminium contamination of oil in some transformers Previously unknown failure mode Two transformers were sufficiently
Slide 46: Hydro Asset Risk Management – Plant and Planning
Hydro Asset Risk Management – Plant and Planning Plant Assets are robust, reliable and simple design Operated within original equipment manufacturer recommendations High reliability and availability and low capacity factors provide operational flexibility to best manage river chain hydrology and risk
Slide 47: 20 Year Hydro Plan
20 Year Hydro Plan Major turbine and generator work set the primary timing of the 20 year plan Ohau B and C refurbishments will be aligned MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015 47
Slide 48: 20 Year Hydro Plan
20 Year Hydro Plan MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015 48
Slide 49: 20 Year Hydro Plan
20 Year Hydro Plan Major turbine and generator work set the primary timing of the 20 year plan Ohau B and C refurbishments will be aligned Long term commitment to the Structural Safety Evaluation Programme MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015 49
Slide 50: 20 Year Hydro Plan
20 Year Hydro Plan MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015 50
Slide 51: 20 Year Hydro Plan
20 Year Hydro Plan Major turbine and generator work set the primary timing of the 20 year plan Ohau B and C refurbishments will be aligned Long term commitment to the Structural Safety Evaluation Programme Control systems, excitation and protection replacements are best fit and will be combined where
Slide 52: 20 Year Hydro Plan
20 Year Hydro Plan MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015 52
Slide 53: 20 Year Hydro Plan
20 Year Hydro Plan Major turbine and generator work set the primary timing of the 20 year plan Ohau B and C refurbishments will be aligned Long term commitment to the Structural Safety Evaluation Programme Control systems, excitation and protection replacements are best fit and will be combined where
Slide 54: 20 Year Hydro Plan
20 Year Hydro Plan MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015 54
Slide 55: 20 Year Hydro Plan
20 Year Hydro Plan Major turbine and generator work set the primary timing of the 20 year plan Ohau B and C refurbishments will be aligned Long term commitment to the Structural Safety Evaluation Programme Control systems, excitation and protection replacements are best fit and will be combined where
Slide 56: 20 Year Hydro Plan
20 Year Hydro Plan MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015 56
Slide 57: Hydro Expenditure Profile
Hydro Expenditure Profile The bulk of stay in business capex is hydro maintenance and IT spend HYDRO CAPITAL EXPENDITURE $M 40 30 20 10 0 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 Projections are not adjusted for inflation (2015 real dollars) Source: Meridian MER
Slide 58: Wind Maintenance Strategy
Wind Maintenance Strategy Te Apiti, our oldest wind farm only just turned 10 years old Repowering options and significant capital reinvestment still 10+ years away Manufacturing quality issues on new farms have been addressed through original equipment manufacturer warrantees Strategy to in-source ma
Slide 59: Future Generation Options
Future Generation Options Chris More Te Apiti White Hill West Wind Ross Island Te Uku Mill Creek Manawatu Gorge Southland Wellington Antarctica Waikato Wellington 91 MW 58 MW 143 MW 1 MW 64 MW 60 MW Opened 2004 Opened 2007 Opened 2009 Opened 2010 Opened 2011 Opened 2014 MERIDIAN ENERGY LIMITED INVES
Slide 60: Current View of Meridian's Pipeline
Current View of Meridian’s Pipeline Three main groups – Consented Development, Unconsented Development and Investigation sites Pouto Consented Development sites: Maungaharuru Central Wind Maungaharuru Central Wind Hurunui Mt Munro Pukaki Hydro Unconsented Development sites: Pouto Hurunui Mt Munro Pu
Slide 61: Portfolio Summary of Options
Portfolio Summary of Options Energy range (GWh pa): 120 to 410 Capacity factors (%): 36 to 44 Installed capacity (MW): 35 to 132 Capital costs ($M): 110 – 331 Unit cost ranges ($/MWh) 79 - 99 (o.60 Euro) 72 - 91 (0.70 Euro) MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015 61
Slide 62: Maungaharuru
Maungaharuru Located on the Maungaharuru range within the Hawkes Bay region Nearest port is Napier, 50km away Proposed site is adjacent to SH5 Site has half the 220kV Wairakei – Whirinaki transmission lines passing over the corner of the site Key physical attributes 8.8m/s mean wind speed 37.7% capa
Slide 63: Maungaharuru – Google Earth Simulation
Maungaharuru – Google Earth Simulation MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015 63
Slide 64: Central Wind
Central Wind Located adjacent to the Central Plateau, 8km southeast of Waiouru The current preferred port for supply would be Port of Auckland The proposed site is close to SH1 and Transpower 220kV Bunnythorpe – Wairakei transmission line Key physical attributes 8.0m/s mean wind speed 35.1% capacity
Slide 65: Central Wind – Google Earth Simulation
Central Wind – Google Earth Simulation MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015 65
Slide 66: Hurunui Wind
Hurunui Wind Located in North Canterbury, 60km north of Christchurch, 10km inland The current preferred port for supply would be Lyttelton The smaller end of the capacity range may be necessary if connection into the local 66kV network is deemed financially beneficial Key physical attributes 7.6m/s me
Slide 67: Hurunui Wind – Google Earth Simulation
Hurunui Wind – Google Earth Simulation MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015 67
Slide 68: Consent Profile
Consent Profile Consents lapse if not given effect to, i.e. construction initiated within a defined period Most wind farm consents have either New Zealand Consent Decay Curve a 5 or 10 year lapsing period GWh Wind Gas Geothermal Hydro 22,000 Consents can, under certain 20,000 circumstances be extended
Slide 69: Improving Yield on Existing Assets – High Wind Ride Through
Improving Yield on Existing Assets – High Wind Ride Through Increases cut out wind speed from 90 km/h to 115 km/h Power Curves at West Wind Tested and retrofitted at West Wind During 13 months of operation delivered 2% improvement in energy Innovation was factory fitted for the Mill Creek turbines Sou
Slide 70: Improving Yield on Existing Assets – 'Blade Furniture'
Improving Yield on Existing Assets – ‘Blade Furniture’ Blade furniture being considered at Te Uku Combination of additional hardware fitted to blades and software upgrade to the turbine Likely to provide an energy uplift of 3% across the site Mill Creek has this functionality fitted, although shorter
Slide 71: Improving Economics on Future Developments
Improving Economics on Future Developments Identify the maximum injection of MW that the national grid can accommodate at the project specific location Identify potential ‘step change’ Optimising Returns (Unit Cost v Farm Size) influences such as grid connection, transformer sizing, number of electric
Slide 72: Pursuit of Step Change Wind Pricing
Pursuit of Step Change Wind Pricing Turbine blades have continued to increase in length over time and capture more energy The larger machines will make higher class 2 wind sites more economic Expecting future price improvements through automation and product standardisation in the manufacturing proc
Slide 73: Global Wind Activity
Global Wind Activity Yield and cost improvements have underpinned large global capacity growth MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015 73
Slide 74: Retail
Retail Alan McCauley MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015
Slide 75: A Tale of Two Countries – Contrasting Retail Markets
A Tale of Two Countries – Contrasting Retail Markets Australia Incumbents offering little differentiation – dominated by 3 large competitors Consolidation occurring amongst second tier retailers Low service levels Higher margins New Zealand Competition remains strong Offers are focused on sign-on credi
Slide 76: Meridian Retail Highlights This Year
Meridian Retail Highlights This Year Operational Aged debt, unbilled customers and no read codes at their lowest level post Canterbury earthquakes Switch-in times for new customers faster than ever before High compliance and reputation with the EGCC on complaints management Smart meter deployment ki
Slide 77: Meridian Retail Highlights This Year
Meridian Retail Highlights This Year Product and Pricing Significant number of historical pricing anomalies resolved Solar export rates for new and current customers reset Farm Source deferred winter payment launched Self service about to launch for SMB1 and Agribusiness Sales and Marketing Auckland
Slide 78: MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015
MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015 78
Slide 79: Competitive Market Update
Competitive Market Update Regulatory Product Saves exemption now in effect Trustpower and Contact rebranding, Trustpower and Genesis bundles Low fixed user charge regime adds to complexity of the industry PPD’s increasing – Contact 22/18%, Energy Online 20%, Mercury 12% Commence Commission commenced r
Slide 80: Meridian Retail's Progress
Meridian Retail’s Progress Phase 1 (FY15) - Consolidation Staff structure realigned with clearer objective delivery Improve Commenced rationalisation of operational systems and processes Increased online channel effectiveness Consolidate Grow Operational framework of Attract, Welcome, Enhance and Reso
Slide 81: Meridian Retail's Progress
Meridian Retail’s Progress Phase 2 (FY16) - Improvement Implement customer facing brand Implementation of Attract, Welcome, Improve Enhance and Resolve model Complete system and process rationalisation Consolidate Grow Improve sales channel conversion and customer retention Phase 3 (FY16-17) - Growt
Slide 82: Remuneration
Remuneration Jacqui Cleland MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015
Slide 83: Employee Remuneration
Employee Remuneration Based on market relativity and individual performance Fixed remuneration Base salary and KiwiSaver Short term incentive scheme At-risk and discretionary Based on achievement of Board approved company profit levels Together with individual performance against stretch objectives E
Slide 84: Executive Remuneration
Executive Remuneration Aligned with shareholders’ interests May be invited to participate in a short term incentive (STI) scheme Similar STI scheme to non executive staff Based on achievement of Board approved company profit levels Together with individual performance against stretch objectives Indivi
Slide 85: Executive Remuneration
Executive Remuneration May also be invited to participate in long term incentive (LTI) scheme LTI was introduced on listing together with a reduction to STI to offset potential cost of the scheme Can only result in executives receiving shares if shareholder value is positive and exceeds peer returns
Slide 86: Executive Remuneration
Executive Remuneration LTI conditions for vesting Continued tenure Positive absolute Total Shareholder Return (TSR) over the three year period Relative TSR against benchmark peer group over the three year period Less than 50th percentile; 0% of shares vest Between 50th and 75th percentile; 50% of sh
Slide 87: Corporate Governance
Corporate Governance Jason Stein MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015
Slide 88: The Meridian Board
The Meridian Board Chris Moller Peter Wilson John Bongard Mark Cairns Jan Dawson Meridian Chair, director since Meridian Deputy Chair, Director since May 2011 Director since May 2012 Chair of Audit and Risk May 2009 director since May 2011 Previously Chief Executive and Current Chief Executive of Po
Slide 89: The Meridian Board
The Meridian Board Role is to provide strategic guidance and have effective oversight of management Responsibility to work in the interests of all shareholders Directors are subject to reappointment every three years Shareholders receive information on candidates standing for election/re- election in
Slide 90: Corporate Governance
Corporate Governance Meridian has adopted policies that reflect best practice Meridian’s governance structure Incorporating principles and Shareholders guidelines from the FMA and NZX and ASX recommendations Appointment Accountability Board focus is on: Meridian Board Promoting ethical and responsibl
Slide 91: Board Committees
Board Committees Audit & Risk Remuneration and Human Resources Integrity of financial reporting Alignment of remuneration and people policies and practices Adequacy of internal controls Fair and responsible remuneration Appointment and performance of policies and practices external auditor Review of
Slide 92: Role of Majority Shareholder
Role of Majority Shareholder Jason Stein MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015
Slide 93: The Crown as a Meridian Shareholder
The Crown as a Meridian Shareholder The Public Finance Act and Meridian’s Constitution require the Crown to hold at least 51% of shares No other person may have more than 10% of the Shares The Crown’s shareholding is monitored by Treasury Management have regular briefings with Treasury officials coveri
Slide 94: The Crown and Shareholder Decisions
The Crown and Shareholder Decisions As a holder of at least 51% of shares, the Crown can control matters requiring majority shareholder approval This includes resolutions for the election and removal of directors The Crown is likely to have influence over any special resolutions requiring 75% majorit
Slide 95: Information Provided to the Crown
Information Provided to the Crown Under the Public Finance Act, Meridian has to provide certain financial information to the Crown This is not publicly available and enables preparation of Government’s consolidated financial statements and forecasts The Crown and Meridian have a confidentiality agreeme
Slide 96: Concluding Remarks
Concluding Remarks Mark Binns MERIDIAN ENERGY LIMITED INVESTOR DAY PRESENTATION 30 April 2015
Slide 97: Company Timeline
Company Timeline Third new Manapouri transformer WAP hearing operating commences Shares NZAS commence NZAS 1 day Capital 400MW one trading Shares trade termination management year notice (deferred on normal notice announced window basis) basis window (conditional) closes May 15 June July August Sept