Building
a better
Aotearoa
New Zealand
2022 Integrated Report
Contact
INTEGRATED
REPORT
2022
Welcome to our third integrated report. This report explains how
Contact creates value over time, or as we say in our company vision,
how we are building a better Aotearoa New Zealand.
Our leadership team has reviewed the report and our CEO Mike Fuge and the Board have confirmed
it is a true and accurate picture of how Contact created value for our stakeholders in the 12 months to
30 June 2022.
We expect it to be of interest to our people, customers, investors, suppliers, business partners,
local communities, tangata whenua, legislators, regulators, policymakers and all other stakeholders.
It follows the principles-based approach of the Integrated Reporting Framework and reflects our
ongoing journey towards integrated thinking, focused on value creation.
This report is dated 15 August 2022 and is signed on behalf of the Board of Directors of Contact Energy:
Robert McDonald
Chair
Sandra Dodds
Chair, Audit and Risk Committee
Our Chair Robert McDonald and the Board of Directors will host shareholders at the Contact Energy AGM
in November 2022. The notice of meeting and agenda will be provided to shareholders in October 2022.
More than 98 percent of Contact Energy shareholders receive digital reports from us. We are very keen
for shareholders to move to digital, and in the meantime, we have ensured the 1,500 integrated reports
we print use environmentally responsible paper and inks.
We are listed on both the NZX and the ASX.
Financial statements
Combined Independent Auditors
and Limited Assurance Report
Corporate directory
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Contents
Jargon buster
Glossary for Te Reo Māori
FY22 summary
Key activity in FY22
Chair and CEO report
Who we are
Our Board
Our leadership team
Ngā Tikanga
Our operations
Creating value
What matters most
Our supply chain
External environment
Energy trilemma
Our business model
Our strategy: Contact26
Progress against strategic themes
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STRATEGIC THEMES
Grow demand
Grow renewable development
Decarbonise our portfolio
Creating outstanding customer
experiences
STRATEGIC ENABLERS
Progress against strategic enablers
Environment, social and governance
Transformative ways of working
Operational excellence
Governance matters
Our Board
Code of Conduct and policies
Risk management and assurance
Remuneration report
Additional disclosures
Statutory disclosures
Sustainability disclosures
TCFD index
GRI index
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CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
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Contact INTEGRATED REPORT 2022 Jargon buster
ASX
CEN
Contact
Australian Securities Exchange.
Contact’s stock ticker on NZX and ASX.
The company called Contact Energy Limited. Unless otherwise
stated, all activities and indicators in this report are for Contact.
Contact26 Contact’s strategy which sets out the company’s priorities and
key activities for the five years from 2021–2026.
EBITDAF
ESG
FY21
FY22
GRI
Earnings before interest, tax, depreciation, amortisation,
and changes in fair value of financial instruments. EBITDAF
is a non-GAAP (generally accepted accounting practice)
measure. Information regarding the usefulness, calculation
and reconciliation of this measure is provided within note A2
to the financial statements.
The environmental, social and governance factors used to
evaluate performance.
The financial year ended 30 June 2021.
The financial year ended 30 June 2022.
The Global Reporting Initiative is an international independent
standards organisation that helps businesses, governments
and other organisations understand and communicate their
impacts on things like climate change, human rights and
corruption.
The Group This is Contact Energy Limited, Contact Energy Trustee
Company Limited (a subsidiary), Contact Energy Risk Limited
(a subsidiary), Simply Energy Limited (a subsidiary), Western
Energy Services Limited (a subsidiary), Drylandcarbon One
Limited Partnership (an associate) and Forest Partners Limited
Partnership (an associate).
HSE
Health Safety and Environment.
NZAS
NZX
SDGs
TCFD
An abbreviation for The Integrated Reporting Framework,
a principles-based framework for corporate reporting.
Aotearoa New Zealand’s Aluminium Smelter is the country’s
only aluminium smelter and is located on Tiwai Peninsula,
across the harbour from Bluff in Southland.
New Zealand Stock Exchange.
Sustainable Development Goals are 17 global goals designed
to be a “blueprint to achieve a better and more sustainable
future for all”. The SDGs were set in 2015 by the United Nations
General Assembly and intended to be achieved by 2030.
The Task Force for Climate-related Financial Disclosures
provides a framework for climate-related financial risk
disclosures.
Terrawatt
hour (TWh) for one hour.
A unit of energy equal to outputting one million million watts
TISR
TRIFR
TWoW
Total Incident Severity Rate is a leading indicator measure
that assesses the potential severity of HSE and process
safety incidents.
Total Recordable Injury Frequency Rate is a globally
recognised measure of injury rates that can be benchmarked.
Transformative Ways of Working is one of our major strategic
themes. It is focused on reimagining our traditional ways
of working.
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FY22 SUMMARY
WHO WE ARE
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VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
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Contact INTEGRATED REPORT 2022
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FY22 SUMMARY
WHO WE ARE
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VALUE
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THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
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Glossary of commonly used Te Reo Māori (Māori language)
Ākonga
Student
Aotearoa
New Zealand
Awa
Hapū
Iwi
River, stream
Kinship group, subtribe
Extended kinship group, tribe
Kaitiaki
Guardian, steward
Kaitiakitanga Guardianship, stewardship
Kaumātua
Elder, elderly person, person of status
within the whānau
Marae
Traditional Māori meeting house
Rangatahi
Youth
Taonga
Tangata
whenua
Te Tiriti o
Waitangi
Treasure, anything prized
People of the land, in Aotearoa New Zealand
Māori as the Indigenous People are known
as the tangata whenua
The Treaty of Waitangi, Aotearoa New Zealand’s
founding document between the British Crown
and Māori chiefs
Tikanga
Custom, protocol
Māori
Mahi
Indigenous Peoples of Aotearoa New Zealand
Whakapapa
Genealogy, lineage, descent
Work, activity
Whānau
Extended family, family group
Mana whenua The hapū and iwi groups that have territorial
Whenua
Land, ground
rights and authority over land
Translations have primarily been
sourced from Te Aka Māori Dictionary.
Contact INTEGRATED REPORT 2022
Key activity this financial year
July
Began seeking registrations of
interest to develop the world’s largest
green hydrogen plant in Southland,
in conjunction
with Meridian.
November
Successfully raised $225m from
investors for Aotearoa New Zealand’s
first certified green capital bond/
corporate hybrid issue.
Hosted a fully virtual Annual Shareholder
Meeting due to Covid-19 lockdown
restrictions in Auckland, with
Jon Macdonald and David Smol
re-elected as directors. Sandra Dodds
and Rukumoana Schaafhausen
formally elected to the Board.
August
Delivered FY21 results with EBITDAF1
of $553m and net profit of $187m.
September
Sandra Dodds joined the Board as an
independent director.
Launched ‘Good Nights’ retail plan with
free power between 9pm and midnight,
and donated $50,000 to Women’s Refuge
Safe Night-athon fundraising appeal.
Announced we will supply Genesis
Energy with up to 62.5MW of renewable
electricity for 15 years from 2025.
Paid 21c per share FY21 final dividend
to investors, following interim dividend
of 14c per share paid in April 2021.
21c
per share
December
Hit milestone of 60,000 broadband
connections.
January
Launched ‘It’s good to be home’ brand
campaign.
Donated $30,000 each to the I AM HOPE,
Women’s Refuge and Plunket charities
via a vaccination drive for our people.
60k
broadband
connections
March
Launched free power for three months
to more than 1,000 Kiwi families
with a newborn baby via our
‘Fourth Trimester’ initiative.
April
Announced joint venture with global
solar developer Lightsource bp for a
series of grid-scale solar generation
projects by 2026.
Acknowledged we have work to do
on gender pay equity as part of the
Mind the Gap initiative where our
overall gap between men
and women is 49 percent.
May
Picked up two awards at the 2022
INFINZ Awards for our green capital
bond and best investor relations.
Launched Bring Your Own (BYO) device
capability for broadband modems.
BYO
modem
October
Inked deals to supply Oji Fibre
Solutions and Pan Pac Forest Products
with renewable electricity until 2034.
February
Upgraded Tauhara geothermal power
station capacity to 168MW, and revised
project costs to $818m.
Announced FY22 interim results with
EBITDAF1 of $322m (up 31% from FY21)
and net profit of $134m (up 72% from
FY21).
Four potential development partners
from around the world shortlisted for
the Southern Green Hydrogen Project.
June
Contact won the top honour of Energy
Retailer of the Year at the New Zealand
Energy Excellence Awards and Simply
Energy won the Innovation in Energy
Award.
Announced that Te Rapa power station
will close in June 2023, reducing
Contact’s long-term scope 1 and 2
greenhouse gas emissions by 20 percent.
Announced 2.5 year major sponsorship
agreement with Women’s Refuge.
1 EBITDAF is a non-GAAP (generally accepted accounting practice) measure. Information regarding the usefulness, calculation and reconciliation of this measure is provided within note A2 to the financial statements.
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CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
6
Contact INTEGRATED REPORT 2022
Robert McDonald
Chair
Mike Fuge
Chief Executive Officer
Chair and
CEO report
Welcome to Contact Energy’s FY22 integrated report. We are
pleased to share our perspectives on another successful year.
In a period of unprecedented global volatility, Contact remains
focused on delivering strong performance and opportunities
for growth – as we continue to create a better Aotearoa New Zealand.
We’re proud of the Contact team’s achievements
in FY22. The Covid-19 pandemic and associated
disruptions for our own workforce, our contractors,
and supply chains continued to create a challenging
environment, but our people have consistently
risen to the challenge.
We continue to deliver good returns for our
shareholders, and we have ensured Contact
is in a strong position for the future.
Reporting Council Framework to report on
material ESG activities, and provide a balanced
view of our performance.
Our Contact26 strategy positions us well to play
to our strengths and respond to external drivers.
This includes rapidly changing stakeholder
expectations and regulatory pressure around natural
resource management and the imperative to reduce
Aotearoa New Zealand’s greenhouse gas emissions.
Strategy
We continue to deliver on Contact26 – our strategy
to build a better Aotearoa New Zealand by leading
the country’s decarbonisation.
Contact26’s strategic pillars are to grow demand
for renewable electricity, develop new, flexible
renewable electricity generation, decarbonise
our portfolio, and create outstanding customer
experiences. This is underpinned by our commitment
to strong environmental, social and governance
(ESG) practices, a focus on operational excellence
and the ongoing transformation of how we work.
This report is structured around the Contact26
strategy. It also uses the Global Reporting Initiative
(GRI) standards and the International Integrated
New renewable
electricity generation
Contact will continue to bring new renewable
projects to market to meet demand. This year we
made solid progress with our Tauhara geothermal
development near Taupō – a nationally significant
renewable generation project that will materially
support the decarbonisation ambitions of Contact
and Aotearoa New Zealand.
In February we announced that the Tauhara power
station is now expected to generate 168 MW of
renewable electricity, up from 152 MW when the
investment was announced in early 2021 – the
result of the geothermal fluid reservoir proving
more productive than anticipated. This capacity
expansion, together with Covid-19 headwinds
including materials, freight and supply chain
challenges, have increased the overall costs of the
development by about 20 percent and will delay
the expected completion to the later part of 2023.
We have announced a $300m investment to develop
a new 51.4 MW geothermal power station at Te Huka,
near Taupō, which we expect to be onstream in 2024.
We have also lodged consent applications for
the redevelopment of Wairākei geothermal station
when consents expire in 2026. Importantly, the
development will move our operations away from
the Waikato river supporting the mauri of the river.
Our future development pipeline of wind and
solar options is progressing rapidly, as we work
alongside partners including Roaring4Os and
Lightsource bp (LSbp). We expect our first
joint venture solar project with LSbp to begin
generating in 2024, and our first wind generation
to start operation around 2027.
Decarbonising generation assets
We are committed to substantial decreases in
carbon emissions from our own portfolio. As we
grow new renewable generation, we’re preparing
to decarbonise our generation portfolio in an
orderly way – managing the balance between
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Contact INTEGRATED REPORT 2022
continued security of supply, minimising emissions
and ensuring energy affordability for New Zealand.
We announced the planned closure in 2023 of our
Te Rapa co-generation power station, and expect
to decommission the gas-fired Taranaki Combined
Cycle (TCC) power station in 2024 after the Tauhara
power station commences operation.
The retirement of these thermal generation
plants will ensure Contact delivers on its target
to reduce Scope 1 and 2 emissions 45 percent by
2026 when compared to 2018.
The planned closures of Te Rapa and TCC, together
with the closure of Otahuhu in 2015, will result
in Contact's emissions reducing by more than
70 percent over a 10-year period.
We are continuing to reduce emissions at existing
generation sites. And we’ve started a trial at our
existing Te Huka geothermal site, exploring how
we can capture emissions from geothermal energy
production and inject them back into the earth.
Growing demand
We continue to pursue new large-scale
electrification opportunities, and are seeing
good demand for our new renewable electricity
generation, with an increasing appetite from major
customers for long-term renewable power supply
agreements. We have signed significant long-term
power purchase contracts that will take around
half of the total renewable energy output from
Tauhara over the next 10 years.
We see significant opportunities for demand
growth including green hydrogen and New Zealand
Aluminium Smelter indicating that it will continue
operations at Tiwai Point.
Customer experiences
Our commitment to innovative products and
experiences for our customers has also paid off
with growth in customer satisfaction, retention
and acquisition this year. This year we have grown
our connections by 9 percent to 580,000.
We launched two major innovations for customers:
our Good Nights plan offering three hours of free
night-time power to all customers, and Fourth
Trimester offering three months of free power
to more than 1,000 families with newborns. Both
attracted a great response.
We also continue to work hard to look out for our
most financially vulnerable customers, offering a
wide range of plans, payment options and tailored
support to ensure customers stay connected and
out of debt. Disconnections and debt write-offs
were significantly down this year.
Customer surveys show our customers are happier
and more likely to recommend us than ever.
We’re winning lots of awards for our customer
service excellence too – including Energy Retailer
of the Year at the New Zealand Energy Excellence
Awards, and four awards at the NZ Compare Awards:
Best Customer Support – Power; Best Mobile
Application; Power Provider of the Year; and the
Supreme Champion Award across Broadband and
Power – awards that our team can feel very proud of.
People
We have a fantastic team, engagement is high,
and we are continuing to build our capability to
grow our business and to support the wellbeing
of our people.
We are committed to substantial decreases in carbon emissions
from our own portfolio.
Customer surveys show our
customers are happier and
more likely to recommend us
than ever.
Our engagement survey results show we are
moving in the right direction, and we know where
we need to keep evolving and improving.
We’re doubling down on the wellbeing of our people,
including launching the Wellbeing Tick programme
and reviewing our existing mental health and
Employee Assistance Programme support.
The Wellbeing Tick programme will transform
our wellbeing culture for the long term.
Our people told us last year that they wanted more
access to training and development, so this year we
launched Contact University – an online learning
portal. Course completions across the business are
up more than 500 percent year-on-year.
We have had some changes to our Leadership
Team this year. Deputy CEO James Kilty and
Chief Corporate Affairs Officer and General
Counsel Catherine Thompson left us. James and
Catherine were both highly valued members of
the Leadership Team and each made a significant
contribution to Contact. On behalf of the Contact
whānau, we thank them and wish them both well.
We are very pleased to have a number of talented
and experienced individuals join the Leadership
team this year. This includes Tighe Wall as Chief
Digital Officer, Iain Gauld as Chief Information
Officer, Jacqui Nelson as Chief Development
Officer, Matt Bolton as Chief Retail Officer,
Chris Abbott as Chief Corporate Affairs Officer,
and John Clark as Chief Generation Officer.
On the Contact Board, Dame Therese Walsh
left in August 2021, and Sandra Dodds joined
the Board in September 2021.
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Financial performance
This year we’ve delivered a solid financial
performance with EBITDAF1 of $537m, a 2.9 percent
decline from last year, with a net profit after tax of
$182 million.
The Future
We are pleased with our FY22 performance,
our strong pipeline of renewable generation
and executional capability. We are optimistic
and ambitious for the future.
Our operating costs and capital expenditure
have been carefully managed. This result has
been achieved in a year with highly variable
hydrology, and while contending with
unprecedented global volatility, inflationary
pressures and supply constraints.
In FY22 we will deliver investors a 35 cents per
share annual dividend, equal to FY21.
While we see continuing turbulence in global energy
markets, the domestic market is performing well
and we remain well-positioned to perform strongly.
Our strategy is closely aligned to Aotearoa
New Zealand’s focus on achieving net zero
emissions by 2050. We will make major steps
forward with the completion of Tauhara and
Te Huka generation plants, further geothermal
investments, our first solar and wind projects, and
the closure of thermal generation assets.
We have a lot more to do to transition to carbon
zero, and to address major issues such as energy
wellbeing and the diversity in our workforce –
and we are putting increasing focus into that.
It continues to be a hugely exciting time to be
involved in the electricity sector. We have set
audacious goals. There is a lot to do but we are
confident we have the people and the capability
to do it.
Lastly, we would like to thank everyone at Contact
for their stellar work throughout the year. We are
proud of you and all that you have delivered.
We have a lot more to do to transition to carbon zero, and to
address major issues such as energy wellbeing, and the diversity
in our workforce – and we are putting increasing energy into that.
Ngā mihi nui,
Robert McDonald
Chair
Mike Fuge
Chief Executive Officer
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1 EBITDAF is a non-GAAP (generally accepted accounting practice) measure. Information regarding the usefulness, calculation and reconciliation of this measure is provided within note A2 to the financial
statements.
Contact INTEGRATED REPORT 2022
Contact
INTEGRATED
REPORT
2022
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Who
we are
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Our Board
Jon Macdonald
Victoria Crone
David Smol
Sandra Dodds
Robert McDonald
INDEPENDENT
NON-EXECUTIVE DIRECTOR
INDEPENDENT
NON-EXECUTIVE DIRECTOR
INDEPENDENT
NON-EXECUTIVE DIRECTOR
Appointed Nov 2018
Appointed Nov 2015
Appointed Oct 2018
Chair, People
Committee
Member, Audit and Risk
Committee
Chair, Development
Committee
Member, Development
Committee
Member, Safety
and Sustainability
Committee
INDEPENDENT
NON-EXECUTIVE DIRECTOR
Appointed Sep 2021
Chair, Audit and Risk
Committee
Member, People
Committee
INDEPENDENT
NON-EXECUTIVE CHAIR
Appointed Nov 2015
Member, People
Committee
Rukumoana
Schaafhausen
INDEPENDENT
NON-EXECUTIVE DIRECTOR
Appointed Mar 2021
Member Safety
and Sustainability
Committee
Member Audit and
Risk Committee
Elena Trout
INDEPENDENT
NON-EXECUTIVE DIRECTOR
Appointed Oct 2016
Chair, Safety and
Sustainability
Committee
Member, Development
Committee
Our directors bring broad knowledge, deep understanding and strong experience to the boardroom table. Their governance
sets our strategic course and enables Contact to thrive, succeed, and navigate risk-taking. They ask the hard questions
until they are satisfied with decisions, help us seize the right opportunities, and ensure we balance the interests of all our
stakeholders.
In the Governance section of this report we include a matrix setting out the Board’s expertise
across a range of strategic skills. You can also find profiles of the directors on our website.
Contact INTEGRATED REPORT 2022
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Our leadership team
Jan Bibby
John Clark
Dorian Devers
Chris Abbott
Mike Fuge
Matt Bolton
Jacqui Nelson
Iain Gauld
Jack Ariel
Tighe Wall
CHIEF PEOPLE AND
TRANSFORMATION
OFFICER
CHIEF
GENERATION
OFFICER
Joined 2019
Joined 2018
Joined
leadership team
Feb 2022
CHIEF FINANCIAL
OFFICER
CHIEF CORPORATE
AFFAIRS OFFICER
CHIEF EXECUTIVE
OFFICER
CHIEF RETAIL
OFFICER
Joined 2018
Joined 2019
Joined 2020
Joined 2009
Joined
leadership team
Feb 2022
Joined
leadership team
Mar 2021
CHIEF
DEVELOPMENT
OFFICER
CHIEF
INFORMATION
OFFICER
Joined 2004
Joined 2017
Joined
leadership team
Sep 2021
MAJOR PROJECTS
DIRECTOR
CHIEF DIGITAL
OFFICER
Joined Apr
2021
Joined 2020
Joined
leadership team
Sep 2021
Our leadership team implements the strategy approved by the Board. They also ensure the Board receives accurate and
timely information about Contact’s operations, performance, legal obligations, reputation, financial conditions and prospects.
They demonstrate strong and clear leadership inside Contact and to our external stakeholders. They manage the day-to-day
operations of our people and our resources to ensure we operate effectively and efficiently. They demonstrate strong and clear
leadership inside Contact and to our external stakeholders.
You can find full profiles of our leadership team on our website.
Contact INTEGRATED REPORT 2022
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Ngā Tikanga – our moral compass
Our Tikanga guides our actions, both as individuals and as Contact,
and is our set of principles, commitments and behaviours.
Principles
Commitments
Behaviours
Pointed focus sharpens us
Human kindness connects us
Curiosity propels us
Progressive defines us
We act professionally at all times.
We care about the health and safety
of our people and minimise health,
safety and environmental impacts on
customers and communities.
We put our energy into things that
matter by:
· adding value to resources under
our control
· being inclusive, encouraging
diversity and expression of ideas
and opinions
· creating value for our stakeholders
· ensuring the sustainability of our
business
· looking after natural and shared
resources
· being a good neighbour in
communities.
We’re authentic and make sound
decisions knowing they’ll be subject
to scrutiny.
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Creating value for our customers and
communities by developing smart
solutions that make life easier.
Creating a rewarding workplace
for our people by valuing everyone’s
contribution, encouraging personal
development, recognising good
performance and fostering equal
opportunity.
Respecting the rights and interests
of communities by listening, and
understanding and managing the
environmental, economic and social
impacts of our activities.
Respecting the rights and interests
of our business partners so we
work collaboratively to create valued,
rewarding partnerships.
Delivering market-leading
performance for shareholders by
identifying, developing, operating and
growing value-creating businesses.
Staying a step ahead, anticipating the
things that are going to matter to our
business and Aotearoa New Zealand.
Contact INTEGRATED REPORT 2022
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FY22 SUMMARY
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Our operations
Connections
1,179employees
61k
shareholders
714k
spent in communities
(Contact only)
580k
total customer connections at 30 June 2022
0tier 1 process safety incidents
8TWh
contracted electricity sales
$2.8b
net assets
(Contact only)
35c
per share dividend
87%
renewable generation
$89m
tax paid
5.1k
4.9k
Volume sold GWh
780
780
2022
2021
Electricity
Natural gas
416k
438k
Connections
by energy type
65k
71k
51k
71k
Electricity
Natural gas
Broadband
450k
420k
Connections
by account type
+39Net Promoter Score
(Contact only)
gender pay equity 787k
95.2%
tCO2e Scope 1 Group emissions
52k
52k
59k
77k
Residential
Business
Other
(including broadband)
All figures at 30 June 2022 or for FY22. The data on this page is for the group (excluding associates) unless otherwise identified.
Read more about Contact on our website.
These connection figures include Simply Energy connnections.
Contact INTEGRATED REPORT 2022
2022 generation output by station and type
This graph shows the relative size of generation output from each station during the FY22 year.
Where we are
Total renewable generation 7,223GWh
Total non-renewable generation 1,046GWh
Auckland
Te Rapa
Stratford
Poihipi
Levin
Simply
Energy
Te Mihi
Ohaaki
Tauhara
UNDER
CONSTRUCTION
Whirinaki
Western
Energy
Wairākei
Te Huka
3,940
(GWh)
Roxburgh (320 MW)
1,775
Hawea
Clyde
Wellington
Simply
Energy
Contact sites
Offices and call centres
Geothermal power station
Hydroelectric power station
Storage lake
Thermal power station
Dunedin
Roxburgh
Subsidiaries
Simply Energy
Western Energy
Clyde (432 MW)
2,165
1,046
(GWh)
Te Rapa (44 MW)
Stratford – Peakers (210 MW)
Whirinaki (155 MW)
Stratford – CCGT (377 MW)
4
179
190
673
Contact delivers
20 percent of Aotearoa
New Zealand’s
electricity generation.
20%
8.3TWh
total generated
Tauhara (168 MW)
Under construction
3,283
(GWh)
Te Huka (28 MW)
Ohaaki (44 MW)
Poihipi (55 MW)
189
322
331
Wairākei (132 MW)
1,055
Te Mihi (166 MW)
1,386
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Geothermal
Hydro
Thermal
Contact INTEGRATED REPORT 2022
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Creating
value
CONTENTS
FY22 SUMMARY
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Creating
value
Sam and Andy from our sustainability team take part in a local planting day in Taupō.
We are contributing to a
better Aotearoa New Zealand
by putting our energy where
it creates sustainable value.
We start by looking at what matters most and reviewing
our supply chain and where impacts occur. We consider
the environment in which we operate and our business
model when we develop our strategy, to ensure we
create value.
It includes an overview of the resources and
relationships (or ‘capitals’) that are used by, or impact
on, our business. This includes external influences such
as access to natural resources, relationships with our
communities, and partnerships with tangata whenua.
The outcomes that emerge from these interactions
are ultimately how we create value for our business,
our suppliers and customers, and for Aotearoa
New Zealand over the short, medium and long term.
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FY22 SUMMARY
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What matters most
We use the Global Reporting
Initiative (GRI) standards and
the Integrated Reporting
Council Framework
to report on material
environmental, social and
governance activities, and aim
to provide a balanced view
of our performance. We also
report our climate change
risks using the Task Force
for Climate-related Financial
Disclosures (TCFD) framework.
“Contact could be a bigger leader, especially explaining
the decarbonisation story and helping people grasp that.”
Assessing our material impacts
We undertook an annual review of our material
environment, social and governance (ESG)
impacts to ensure we are effectively identifying
and managing them. This year’s review involved
scanning our external environment and in-depth
interviews with internal and external subject
matter experts, in accordance with the updated
2021 GRI standards guidance.
Working with independent consultants Proxima,
we identified 15 subject matter experts with
knowledge about our sector, communities,
environment and other key material topics.
Proxima interviewed each expert about these
topics, with a focus on each individual’s areas of
expertise. Interview responses helped inform our
list of material topics which considers areas of
positive and negative impact of Contact’s business
activities, both current and potential, and their
relative significance.
In partnership with Proxima, a leadership steering
group then evaluated the significance of the topics
and prioritised them as high, medium or low impact.
As part of the prioritisation, we considered
how harmful or beneficial the impact is for the
stakeholders affected, how widespread the impact
is, how long the effects last and how likely and
severe the potential impacts are. The material topics
were then presented to, and endorsed by, the Safety
and Sustainability Committee. The inclusion of a
material topic does not mean that the issues are
not being addressed or are being addressed poorly,
but that the impacts of them are significant.
Areas of expertise covered
by interviews
The areas of expertise covered by the subject matter
experts are listed below. We also incorporated
insights gained from our stakeholders throughout
the year, along with feedback from an internal
workshop of Contact “future thinkers”.
• Geothermal land impacts
• Legal/regulatory
• Infrastructure
• Tangata whenua
• Value creation, including financial
• Environment, water and biodiversity
• Environment and community
• Renewables and innovation
• Customer relationships
• Market economics
• Climate and carbon
• Geothermal environmental and community impacts
• Energy hardship
• Energy efficiency/demand response
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Contact INTEGRATED REPORT 2022
“Contact has lots of opportunities for different
and better partnerships with mana whenua;
and needs to be aligned with mana whenua
given their importance as investors as well as
customers.”
United Nations Sustainable Development Goals
We also mapped the 13 material topics against the United Nations’
17 Sustainable Development Goals, and identified six goals where
we believe Contact can have the greatest positive impact.
You will see these icons in the report where they relate to
specific sections.
What we heard
Four clear themes emerged from our review:
• Opportunities for positive impact through collaboration, partnership
and leadership: Collaboration with large customers, business partners,
communities, community groups and tangata whenua are seen as
essential to make progress on issues of decarbonisation, energy hardship,
energy efficiency, demand response, community engagement, biodiversity
and the environment.
• Addressing energy hardship and affordability could be a point of
difference: Contact and other major retailers will be expected to do more
to address energy hardship and affordability issues for those most in need.
Affordability and access to the benefits of micro distributed generation
(and emerging peer-to-peer markets) are seen as challenges needing to
be addressed for a just transition.
• Impacts on biodiversity and water will continue to grow in significance:
Contact is seen to have an important role to play in ecosystem health,
and this should consistently go beyond compliance. Community interest
in impacts on water and biodiversity are expected to increase. The health
of native fish species that are threatened with extinction is particularly
significant.
• Innovation on the retail side of the business can provide system
benefits and opportunities: Contact has an opportunity to explore
innovation on the retail side of the business. Grid flex and demand
response were seen as areas ripe for innovation that could help achieve
national decarbonisation goals. Stakeholders saw reputation benefits
for Contact from being more active and vocal on working for the wider
interests of Aotearoa New Zealand.
Our next step is to look at these impacts across the business to drive and
embed a greater sustainability focus, and to select two or three impact
areas to focus on where Contact can deliver leadership and show significant
progress in the short term.
“Contact could proactively address the coming
spike in energy hardship and affordability issues
arising from the current economic climate.”
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The material topics map
Within these four themes, we identified 20 key impacts that are material to our business.
These are shown below and on the next page. Our supply chain shows where these impacts occur.
Material topic
Definition of topic
Sections of the report
High impact
Generation
emissions
Renewable
energy supply
Decarbonisation
and
electrification
Demand
flexibility
Greenhouse gas emissions from electricity generation activities and burning
fossil fuels in power plants.
Secure, reliable and sufficient supply of renewable energy.
Decarbonisation of commercial and residential energy use through more
energy efficiency and increasing electrification to replace fossil fuels.
Managing electricity time of use/demand flows and battery storage to
maximise the use of renewable electricity, and minimise thermal
generation to reduce national carbon emissions and maximise efficiency.
Tangata whenua
partnerships
Partnership approach and manage whenua, awa and other taonga in
the spirit of Te Tiriti to preserve and restore cultural heritage affected by
generation assets and activities.
Freshwater
system health
The health and wellbeing of native freshwater fish species; and the health
of river systems relating to river flows and the discharge of cooling water
from geothermal generation.
Grow renewable
energy
Decarbonise our
portfolio
Environment, social
and governance
Grow renewable
development
Grow demand
Decarbonise our
portfolio
Grow demand
Environment, social
and governance
Environment, social
and governance
The health of above and below ground biodiversity is affected by hydro,
gas and geothermal generation activity.
Environment, social
and governance
In contrast with last year’s material topics:
• Tangata whenua wellbeing is now a separate
topic from community wellbeing.
• Climate change is now broken down
into decarbonisation and electrification,
generation emissions, and demand flexibility
to acknowledge more clearly the different
ways carbon emissions arise and can be
addressed, with the climate change topic
covering impacts arising from climate
change risks.
• Energy hardship is expanded to include
affordability, referring to both residential and
business customers.
• Water is clarified to refer specifically to the
health of freshwater systems, including life
in the water.
• Customer wellbeing and experience is
refined to customer trust.
• Privacy is extended to include cyber security.
• Biodiversity is clarified to include restoration
(positive impact) as well as protection.
• Natural resource protection is added to cover
stewardship impacts of land ownership and
management.
• Ethical and sustainable procurement now
incorporates resilient supply chain.
• Diversity and inclusion incorporates human
rights.
Community wellbeing and job creation in the local economy.
Environment, social
and governance
• Regulation has been removed as it is not an
impact, but an influence.
Energy hardship
and affordability
The inability of individuals, households, whānau and businesses to access
adequate energy services to support wellbeing.
The impact is exacerbated by current high costs of microgrid and self-
generation opportunities that could reduce energy costs for customers,
and support a just transition to a low carbon future.
Creating outstanding
customer
experiences
Biodiversity
protection and
restoration
Community
wellbeing
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The remaining key impacts are shown on this page.
Material topic
Definition of topic
Sections of the report
Medium impact
Reliable energy
supply
Constant and continuous energy supply to customers and broader society
in the face of future change, including increased demand and impact from
extreme weather events.
Grow renewable
development
Customer trust
Trust levels with customers affected by interactions with and services provided
by Contact.
Creating outstanding
customer
experiences
Team culture
The way that teams work together based on common goals, values, beliefs,
expected and accepted behaviours and ways to treat each other.
Transformative ways
of working
Workforce
health and
wellbeing
Diversity and
inclusion
Natural resource
protection
Infrastructure
safety
Climate change
impact on assets
Privacy and
cybersecurity
Environmental
pollution
The safety, physical health and mental wellbeing of all workers affected
by issues such as fair and flexible work practices, remuneration levels and
opportunities for personal development.
Transformative ways
of working
Equitable treatment and equal opportunity, irrespective of personal
characteristics such as age, gender, sexual orientation, ethnicity, country
of origin, or disability.
Harm to the integrity and health of the land and Earth's natural resource
systems from the extraction of renewable and non-renewable resources,
including geothermal liquid, and downstream effects of hydro dam
generation, such as flooding or drought due to dams holding back or
releasing flows.
Transformative ways
of working
Environment, social
and governance
The potential of infrastructure connected to Contact and its operations
to cause harm, injury or loss to people, society or environment.
Transformative ways
of working
Potential harm resulting to others as a result of climate change impacts
on Contact’s assets and infrastructure.
Environment, social
and governance
Privacy and security of customers’ personal information and other information
required for Contact’s operations, as well as potential social and economic
harm resulting from cyber-attack on Contact’s systems.
Operational
excellence
Pollution of air, land and water either directly from the operation of
geothermal and thermal energy stations, or through ancillary activities such
as cleaning, weed control and drilling on well pads as well as waste generated
from station activities.
Environment, social
and governance
Sustainable
procurement
Procurement practices that have the potential to cause adverse impacts
on the environment, economy and society, including people’s human rights.
Environment, social
and governance
Contact INTEGRATED REPORT 2022
Our supply chain
1. We generate
2. We trade
3. We innovate
4. We sell and serve
We own and operate 11 power
stations and produce the majority
of our electricity from our renewable
hydro and geothermal stations.
Our natural gas and diesel-fired
power stations operate to ensure
the lights stay on for New Zealanders
when intermittent renewable
plants cannot operate.
We sell the electricity we generate
on the wholesale market. We
purchase goods and services
from more than 2,000 suppliers.
We also trade a range of financial
products to manage our risk and
create value.
We create smart solutions that
are good for people (tiaki tangata)
and the environment (tiaki taiao)
to help customers, partners,
suppliers and communities have
a better quality of life. We are
an innovative, safe and efficient
generator, actively working with
our customers, partners and
suppliers to improve energy
efficiency, reduce emissions
and fight climate change.
As a retailer we sell products
and services to thousands of
individuals and businesses to
meet their energy and broadband
needs.
National
Grid
Lines
companies
Our
impacts
Generation
Corporate activities Operational presence Customer service
Generation emissions
Tangata whenua partnerships
Freshwater system health
Demand flexibility
H
G
H
I
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M
U
D
E
M
Renewable energy supply
Renewable energy supply
Freshwater system health
Demand flexibility
Biodiversity protection and
restoration
Decarbonisation and electrification
Demand flexibility
Community wellbeing
Energy hardship and affordability
Biodiversity protection and
restoration
Community wellbeing
Energy hardship and affordability
Infrastructure safety
Workforce health and wellbeing
Infrastructure safety
Reliable energy supply
Climate change impact on assets
Diversity and inclusion
Climate change impact on assets
Customer trust
Environmental pollution
Team culture
Environmental pollution
Privacy and cybersecurity
Natural resource protection
Privacy and cyber security
Climate change impact on assets
Sustainable procurement
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External environment
The energy trilemma
The external environment impacts how we create value.
This includes economic conditions such as the Covid-19 response,
technological change, regulatory policymaking such as planning material
greenhouse gas emissions reductions over the coming decades and
implementing the recommendations of the Electricity Price Review, societal
change as the population ages and diversifies, and environmental factors
such as climate change. For more detailed observations about the external
environment for Contact in FY22 and beyond, please read the report from
our Chair Robert McDonald and our CEO Mike Fuge, and Contact26.
“The global energy sector is facing unprecedented
change as countries strive to decarbonise and shape a
more inclusive energy transition as they seek to recover
from the economic shocks generated by the pandemic.”
The World Energy Council
The World Energy Council’s energy trilemma is a three-
dimensional problem that involves balancing the security
of energy supply with environmental sustainability and
affordability.
It provides a framework for focusing the areas where Contact puts its energy
to create sustainable value for New Zealanders; we’re working hard to
improve accessibility, demonstrate reliability and look after the environment.
The trilemma also demonstrates the competing demands and trade-offs
at play. Pushing harder on one dimension of the trilemma may require
concessions from the others. For example, requiring energy production
in Aotearoa New Zealand to be 100 percent renewable would likely be
prohibitively expensive, but a focus on electrification of industrial
heat and a target of 95 percent renewable energy would still deliver
excellent environmental outcomes.
In the Contact context:
• accessibility is focused on customer wellbeing, energy hardship
and tailoring our products and services to customer needs.
• reliability is focused on the resilience of our supply chain, the impact
of regulation, financial sustainability, the reliable supply of energy,
and the safety and wellbeing of our people.
• environmental sustainability is focused on community wellbeing,
climate change and greenhouse gas emissions, renewable energy,
water and biodiversity.
“New Zealand’s energy sector has again been ranked as
one of the top 10 worldwide by the World Energy Council.
We should be proud to be one of only nine countries globally
– and the only country outside Europe – to achieve the top
‘AAA’ rating across the Energy Trilemma’s three metrics
of security of supply, affordability and sustainability.”
ERANZ
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Our business model –
creating value by:
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undertaking business activities in alignment with our
Tikanga, vision and strategy, overseen by good governance
deploying financial, natural, relationship, physical asset and
people capitals factoring in external environment influences
delivering outcomes in alignment with our strategy.
Capitals
Nature
People
Relationship
Finance
Asset
Tikang a
ā
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N
R
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G
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c e ssibility
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S t a k
Contact26 – Building a better Aotearoa New Zealand
Growing electricity demand
Growing renewable development
Decarbonising our portfolio
Creating outstanding customer experiences
Operating with great ESG practices, operational
excellence and transformative ways of working
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We depend on various forms of capital for our success and the stocks of these increase, decrease or change in the course of our business activity.
Nature
Using, caring for and
managing natural resources
and environmental assets are
fundamental parts of Contact’s
business. This includes water,
biodiversity, geothermal
steam/fluid, gas, air quality,
land, carbon, pest control
and ecosystem impacts.
People
The expertise, competence
and passion of everyone from
our Board and Leadership
Team through to those in our
offices and sites underpins
our operations. Our approach
is embodied in our Tikanga.
This includes how we work
together, manage risks, look
for improvements and treat
each other with respect.
Relationships
Our social licence to operate
relies on myriad relationships
within and between our
communities, stakeholders and
networks. It relies on building
goodwill and earning trust
with all our stakeholders
including tangata whenua,
customers, communities,
investors, regulators, media,
suppliers and our own people.
Finance
We have a pool of funds that
we deploy to produce and
deliver energy, serve our
customers and undertake all
of our other activities. This has
been generated through our
business activities, investors and
debt arrangements, and relies
on us delivering on our strategy.
Assets
We use many physical and
intellectual assets to deliver
reliable, affordable and
environmentally sustainable
electricity. These include power
stations, offices, vehicles,
transmission/distribution
connectivity, and our reputation,
website and application
software, IT systems, customer
databases, brands, licences
and internal ‘know-how’.
Contact INTEGRATED REPORT 2022
Our strategy: Contact26
Our strategy to lead New Zealand’s decarbonisation
Grow demand
We’re growing demand for
New Zealand’s renewable
electricity in a range of ways.
Grow renewable
development
We’re developing new, renewable,
flexible electricity generation as
the market evolves.
Decarbonise
our portfolio
We’re decarbonising our portfolio of
generation assets (and the New Zealand
electricity market) via an orderly
transition to renewable generation
(managing the balance between
continued security of supply, minimal
emissions and affordability).
Create outstanding
customer experiences
We’re creating outstanding
customer experiences as we build
New Zealand’s leading energy and
services brand to meet more of our
customers’ needs.
This will be underpinned by three key enablers
Environmental,
Social, Governance (ESG)
• Create long-term value through our
strong performance across a broad set of
environmental, social and governance factors.
Transformative
ways of working (TWoW)
• Use technology to modernise our operating model
• Increase employee engagement to attract and
retain talent.
Operational
excellence
• Use innovation to continue to improve business efficiency
• Prudent management of stay-in-business capital
expenditure to deliver value
• Capture economies of scale and further digitise our business.
Contact
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FY22 SUMMARY
CONTENTS
WHO WE ARE
WHO WE ARE
CREATING
CREATING
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VALUE
STRATEGIC
STRATEGIC
THEMES
THEMES
STRATEGIC
STRATEGIC
ENABLERS
ENABLERS
GOVERNANCE
GOVERNANCE
MATTERS
MATTERS
ADDITIONAL
ADDITIONAL
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DISCLOSURES
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FINANCIAL
STATEMENTS
STATEMENTS
26
26
We are pursuing our long-term vision to create and contribute to a better
Aotearoa New Zealand by leading the country’s decarbonisation journey.
Our Contact26 strategy sets out our approach to
achieving this by 2026, underpinned by the energy
trilemma and two structural shifts.
The first key shift was Rio Tinto's agreement
in January 2021 to extend the operation of the
New Zealand Aluminium Smelter (NZAS) at
Tiwai Point to 2024. Rio Tinto is now looking
to continue operating NZAS beyond 2024 and
has begun exploring potential pathways with
electricity generators. This news provides some
much-needed certainty that a transition away from
the electricity sector’s reliance on this significant
source of demand (13 percent of total electricity
demand in Aotearoa New Zealand) could be
achieved in an orderly way.
The second is the profound societal shift brought
on by growing awareness and concern about
the impact of climate change. Stakeholder
expectations and regulatory pressure continue to
accelerate around natural resource management,
and the drive for action to reduce Aotearoa
New Zealand’s greenhouse gas emissions.
The drive for decarbonisation is combining with
advances in technology to accelerate the shift toward
electrification across the economy. Fossil fuel input
costs have rapidly risen, and are expected to keep
rising. Although there is near-term volatility around
costs associated with green technologies (particularly
off the back of Covid-19 supply chain issues), our long-
term view is that technology will evolve to become
more accessible, affordable and widely used.
Clean, low-cost, renewable electricity is now becoming
increasingly attractive and in demand, with a strong
focus to electrify and move away from thermal.
Opportunities within our strategy allow for
reduced reliance on NZAS and the ability to
deliver on decarbonisation by electrifying
Aotearoa New Zealand’s energy needs as well
as growing demand for renewable energy.
Strategic themes
Our Contact26 strategy has four strategic priorities:
• we’re growing demand for Aotearoa New Zealand’s
renewable electricity in a range of ways;
• we’re developing renewable energy generation
to remain flexible as the market evolves;
• we’re decarbonising our portfolio of generation
assets (and the Aotearoa New Zealand electricity
market) via an orderly transition to renewable
generation, as we manage the balance between
secure supply, minimal emissions, and affordability;
and
• we’re creating outstanding customer
experiences as we build Aotearoa New Zealand’s
leading energy and services brand to meet more
of our customers’ needs and support renewable
development ambitions.
Strategic enablers
These priorities are underpinned by three
programmes of work that are our strategic enablers:
• a commitment to environment, social and
governance outcomes, as we know strong ESG
credentials will help us create long-term value;
• the continuation of our operational excellence
programme driving efficiency and best practice
through innovation and digitalisation; and
• our transformative ways of working to create
a flexible and high-performing environment to
attract and retain talented people.
Why will we succeed?
The key capabilities that will allow us to move on
our Contact26 strategy and set us apart from our
peers include:
• Renewable assets and a development pipeline
to back this demand. Our portfolio is able to
provide firm and flexible electricity supply and low
costs. Our hydro power stations deliver low-cost
electricity and flexibility and attract new demand
from new sources (e.g. international data centres).
Our geothermal power is the lowest cost baseload
power in the market, and our operating costs are
unmatched. We have a strong pipeline to build
on this, as we look to complement the Tauhara
development with additional geothermal options
when market conditions allow. Our future pipeline
of wind and solar options is also progressing
strongly, as we work alongside our world-class
partners Roaring4Os and Lightsource bp.
• Commodity risk management. We have
considerable flexibility in our portfolio, with our hydro
assets, demand flexibility capacity, thermal plant
and gas storage. This allows us to manage our risks
and make choices between different fuel sources.
This will become more important as Aotearoa
New Zealand’s proportion of renewable electricity
generation grows, and prices become more volatile.
• Knowledge and capabilities in decarbonisation
that provide us with a growth platform. For example,
Western Energy brings innovative capabilities that
maximise well efficiency, production and value;
and Simply Energy brings commercial and industrial
customers with a package of demand flexibility,
long-term power pricing agreements, and deep
knowledge around electrification options. Last
year we were also the first gentailer to complete a
large-scale industrial electrification, working with
Open Country Dairy on their new electrode boiler.
Measuring success
Each of the strategic themes has a set of ambitious
measures that provide insights into the anticipated
areas of activity and define what success will look like.
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Progress against strategic themes
Eighteen months into strategy execution,
we have seen solid progress.
Complete/On-track
Minor delay
Major delay
Strategic theme
FY22 Achievements/progress
Contact26 strategy targets1
Grow demand
Southern Green Hydrogen RFP completed, down to the final two participants
Engaging with several parties about industrial electrification opportunities
Lake Parime data centre construction underway, interest from other data centre operators
Lock in major industrial user electrification
NZAS negotiations underway
Supported around 50MW of new-to-market lower South Island electricity demand
Grow
renewable
development
Build Tauhara
Te Huka 3 investment decision
Secure solar partnership or add capability
Wind monitoring mast erected
Completed the economic assessment of a 100MW battery energy storage system investment
Current battery commodity costs make the project challenging, investment will be
reconsidered when market conditions allow
Decarbonise
our portfolio
Outline lowest cost/least carbon solutions for thermal assets in transition to 100% renewable
Announced the closure of Te Rapa in 2023, 12 month extension to TCC to 2024. On target to
meet carbon reduction commitments.
Thermal review ongoing
Electricity 'swaption' with Meridian agreed for 2023 and 2024
Create
outstanding
customer
experiences
Launch time of use offer, with extension into EVs
Targeted growth in broadband and energy connections
SAP finance and generation on track, CRM implementation experiencing delays
Pilot launch of wireless broadband
Investigate data driven energy monitoring commercial models
Launch new brand position
• Senior in-house capability to support industry
electrification partnerships by 2021
• 100 MW of new commercial and industrial
demand by 2025
• Identify 300+ MW of market-backed demand
opportunities, replacing NZAS in the lower
South Island by end of 2024 (e.g. hydrogen).
• Tauhara online by 2023
• Final investment decision on next renewable
build (e.g. Wairākei geothermal, new wind,
new solar) by 2024
• Decision on North Island battery by end of 2023,
for delivery in 2024
• 100 MW of demand response capacity by 2025.
• Complete thermal review in 2021, and executed
by the end of 2022
• TCC decommissioned by end of 2023
• Reduce Scope 1 and 2 GHG emissions 45%
compared to 2018 baseline by 2026.
• Top 10 ‘most trusted brand’ by 20252
• +650,000 customer connections by 2025
• CTS < $90 per connection3
• 75% of customer interactions through digital
channels.
1 Set in May 2021.
2 As per the Colmar Brunton Rep Track report.
3 Re-based for operating cost reclassifications in FY22.
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Grow demand
Material topics
Decarbonisation and electrification
Demand flexibility
We’re growing demand for Aotearoa
New Zealand’s renewable electricity
in a range of ways. We’re making
investments to help accelerate the
country’s transition from thermal to
renewable energy sources, and working
with customers, partners and suppliers
to grow demand for renewable
electricity at their end.
We are pursuing new large-scale demand
opportunities, and have announced our first project
from that pipeline – a new data centre in Otago.
We are also making good progress with Southern
Green Hydrogen, our Joint Venture with Meridian
Energy to build the world’s first large-scale green
hydrogen plant.
Our work with Simply Energy is helping industrial
customers to adopt energy solutions that help
them reduce energy consumption, encourage
off-peak power use, and to shift from coal boilers
to electrification.
We have also signed long-term power purchase
agreements for around half of the electricity
that our Tauhara geothermal power station
will produce. These sorts of deals are a vote
of confidence from industrial customers who
are willing to make long-term commitments
to support new investments in renewable
generation.
Growth in Demand Flex
We continue to grow our demand flexibility
services through our subsidiary Simply Energy's
innovative Demand Flex programme.
We’ve added 16 new customers, and now have
46 customers across 59 sites signed up to the
programme, providing an average flexible load
of over 17 MW and a maximum potential load of
more than 36 MW.
As well as customers being paid to power down
equipment when the grid needs a helping
hand (balancing supply and demand), Simply
is expanding the programme to offer additional
demand flexibility benefits.
Customers will soon be able to reduce their energy
costs by participating in ‘Demand Management’,
following a proof-of-concept pilot with two
customers, Mancold and Venison Lamb Packers.
Demand Management will enable customers
to manage load onsite by shifting consumption
out of peak periods when electricity typically
costs more and has a higher carbon footprint.
Customers can also make further cost and carbon
savings by reducing load when the local network
is constrained – such as on cold winter evenings.
On the electrification front, Simply is combining
its flexibility services with other energy strategies,
such as energy efficiency and long-term structured
supply deals, to help customers shift from fossil
fuels to electricity for their industrial heat demands,
reducing long-term costs and carbon emissions.
Simply is also providing solutions that better use
existing network capacity and have the smarts to
match real-time generation with consumption,
alongside creating the commercial models
required to deliver low-carbon solutions.
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Contact INTEGRATED REPORT 2022Strategic themes CASE STUDY
CASE STUDY
A plug for efficiency
Working with Alliance
Simply Energy ran a pilot this year with the
Energy Efficiency and Conservation Authority
(EECA), Wellington City Council, and Open
Country Dairy to help reduce energy waste
from buildings.
EECA estimates that, on average, building
energy performance could be improved by
20–25 percent. With commercial buildings
using 21 percent of Aotearoa New Zealand’s
electricity, there’s a big opportunity to reduce
carbon emissions by reducing energy waste.
The pilot uses innovative technology through
a partnership with United States-based smart
plug and building insights company Sapient.
Installed throughout buildings, the smart plugs
capture efficiency data for equipment plugged
into them. After a few weeks, the system makes
efficiency suggestions, and indicates how much
money could be saved by implementing the
suggestions. Customers can accept, override or
automate the suggestions at the press of a button.
Based on the pilot, the technology is expected
to deliver plug load savings of around 20 percent
when it is rolled out later this year. It’s another
way we’re adding value for customers and
creating a better Aotearoa New Zealand.
In May Simply signed a three-year flexibility
services agreement with Alliance, to support
the operation of an electrode boiler being
installed at its Lorneville plant near Invercargill.
Simply worked closely with Alliance, the
local network company and Transpower to
identify how much spare network capacity was
available to operate the boiler on terms that
made the project commercially viable.
The Simply team also helped Alliance size how
much network capacity was needed to meet its
steam requirements and materially reduce coal
usage.
Network capacity is normally sized by making
sure the site can meet the new load in addition
to running other operational activities, such as
heating, cooling and refrigeration, at peak times.
With limited cost-effective extra capacity available
from the local network, rather than settle for a
smaller boiler, Simply identified ways to increase
the size of the boiler and the potential carbon
savings, using its Demand Flex technology.
The technology will enable Alliance to use up to
10 MW of the site’s upgraded 14 MW electrical
capacity when it’s not needed elsewhere.
While the upgrade doesn’t provide enough
capacity to displace coal entirely, it keeps
further electrification options open for Alliance
and has given them the confidence to select
a 16 MW electrode boiler for when additional
network capacity becomes commercially viable.
Simply is enabling further carbon and cost savings
by using Demand Flex to allow Alliance to switch
to using its coal boiler when carbon emissions
are lower from burning coal onsite than using
electricity produced by thermal generation.
The electrode boiler is expected to be up
and running by October 2023 and will save
16,800 tonnes of carbon a year, halving carbon
emissions from coal at Alliance’s Lorneville
plant within three years.
As well as giving customers an added revenue
stream, the programme gives them more control
over their electricity use and empowers them to
take climate action.
Simply is on track to deliver 100 MW of targeted
load growth by 2025, and earned the award
for Innovation in Energy at this year’s Energy
Excellence Awards.
Decarbonising process heat
One of the biggest opportunities to reduce
greenhouse gas emissions is through decarbonising
process heat.
The energy sector (including transport) accounts
for around 40 percent of Aotearoa New Zealand’s
greenhouse gas emissions, and process heat
makes up 27 percent of this. More than half the
country’s process heat demand is met by burning
carbon intensive fossil fuels.
Simply Energy helps customers find commercially
viable opportunities to reduce process heat carbon
emissions, through efficiency and electrification –
working alongside networks, engineers and energy
markets to help customers navigate the challenges
and opportunities.
Over the past year, Simply supported several big
energy users to establish commercially viable
projects to reduce their process heat carbon
emissions.
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Contact INTEGRATED REPORT 2022Strategic themes CASE STUDY
Southland’s first
eco-industrial park
Simply Energy is working with Southland-based
Makarewa Coolstore in an industry-leading project
to build Southland’s first eco-industrial park.
Makarewa Coolstore plans to develop its
20-hectare brownfields site into a network of
circular economy businesses that contribute
towards sustainable development for Southland.
Simply is helping coordinate energy
infrastructure for the park, which will enable
Makarewa Coolstore and its tenants to benefit
from sharing infrastructure and utilities.
The first step was establishing market
arrangements to allow tenants to share the
network charges and pay only for their own
consumption, as Simply explores other options
such as capturing the cost benefits of flexible
load and scale for increasing capacity to the park.
Tenants will also have the opportunity to
participate in demand management, to
manage load onsite by shifting consumption
out of peak periods when electricity typically
costs more and has a higher carbon footprint,
and to further reduce costs and carbon
emissions by reducing load when the local
network is constrained.
Simply is helping Makarewa Coolstore explore
other benefits from shared utilities, such as
managing water supply to the park through
the embedded network, diverting waste
refrigeration heat for secondary use, installing
a single large boiler to service the whole park,
exploring the potential to install one or two
wind turbines, and identifying options to keep
the park’s capacity ahead of tenant demand.
The collective benefit of the proposed energy
infrastructure is significant. It will maximise
the use of renewable energy, improve energy
efficiency, lower energy and asset maintenance
costs, and reduce energy waste and emissions.
Long-term power purchase
agreements for renewables
Our investment in new renewable electricity
generation, including our new Tauhara geothermal
power station development, is paying off with major
customers signing up for long-term renewable
power supply agreements.
International interest in
Southern Green Hydrogen
We have had significant international interest in
the Southern Green Hydrogen Project, a joint
venture between Contact and Meridian Energy to
build the world’s first large-scale green hydrogen
plant in Bluff.
In August, we signed a new contract to supply
Genesis Energy with renewable electricity from
Tauhara for 15 years from 1 January 2025. Genesis
will take up to 62.5MW of electricity – 37 percent
of Tauhara’s total output capacity.
And in October we signed two 10-year deals to
supply renewable electricity to forestry products
manufacturer Pan Pac Forest Products and pulp
and paper company Oji Fibre Solutions. We will
supply both Pan Pac and Oji Fibre Solutions with
a portion of their electricity requirements through
until 2034, with a combined total of 25 MW, also to
be delivered by Tauhara.
These sorts of deals are a vote of confidence in
our strategy of displacing thermal generation and
growing demand for renewable electricity, as we
continue to invest in renewable generation for a
better Aotearoa New Zealand.
We have also signed a long-term energy supply
agreement with our existing customer, Foodstuffs.
The agreement gives participating Foodstuffs
franchisees longer-term price certainty and
stability, during a period of high wholesale prices.
For Contact, we were able to maintain supply to an
important customer and lock in price certainty for
future electricity generation.
We expect these types of deals to help drive
demand for our growing pipeline of renewable
projects. Negotiations are already underway with
other parties who are interested in contracting for
new renewable generation, including geothermal,
wind and solar.
An international call for registrations of interest for
development partners for the 600 MW hydrogen
production facility resulted in a large response
from energy companies and technology providers.
This process led to a shortlist of four potential
partners, all with strong hydrogen supply chain
capability and a willingness to invest.
Two Australian companies, Woodside Energy and
Fortescue Future Industries, have been shortlisted
for final stage negotiations. They will provide more
detailed proposals by the end of August 2022, with
a lead developer likely to be selected soon after.
The final investment decisions could be made as
early as 2024, with production beginning in late
2026 or 2027.
The plant has the potential to earn hundreds of
millions of dollars in export revenue, create new
employment opportunities in Southland, and help
the transition to a low-emissions, climate-resilient
economy in Aotearoa New Zealand, and overseas.
Contact and Meridian are working closely with
Ngāi Tahu on the project.
Green hydrogen is regarded as the most promising
energy source to modernise ‘hard to abate’ sectors
such as heavy transport, fertiliser, shipping, aviation
and industrial processes that currently rely on fossil
fuels. It is produced by using renewable electricity
to split water into hydrogen and oxygen.
The strong international interest demonstrates
there are imminent markets for green hydrogen
and that Aotearoa New Zealand’s renewable
energy resources have substantial potential for
export, and to help modernise our economy.
The scale of the project will create economies of
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Contact INTEGRATED REPORT 2022Strategic themes CASE STUDY
Demand flexibility for new
data centre
Contact and Simply Energy signed a renewable
electricity supply agreement this year for a
low-emissions data centre being developed
near the Clyde Dam by UK-based digital
infrastructure company Lake Parime.
The data centre will use Simply’s Demand
Flexibility technology, which will enable its
demand to increase or decrease depending
on Aotearoa New Zealand’s electricity needs,
weather, and hydro generation water flows.
Demand Flexibility has an important role to
play in meeting growing electricity demand
while Aotearoa New Zealand transitions to a low
carbon future. It does this by helping to reduce
our reliance on thermal generation at times of
peak demand and to accommodate the fact that
more of the country’s energy is sourced from
intermittent renewables like wind and solar.
Our agreement with Lake Parime also means
that at times of low demand, if it is raining
and our storage lakes are at capacity, we can
continue to generate electricity for the data
centre to use, rather than having to spill it.
We will supply 10 MW of electricity to the data
centre for high-performance, decentralised
computing applications such as machine
learning, weather models, data visualisations,
block chain and crypto currency mining.
This is the first announced project from our
pipeline as we pursue new large scale industrial
demand opportunities.
The data centre will comprise eight 40 foot
‘power box’ containers. Earthworks have
been in full swing since resource consent was
granted in March and the centre is expected
to be commissioned by November 2022.
scale that will accelerate the development of the
domestic hydrogen market.
The proposals received from both final
counterparties during the initial selection
process make it clear that large-scale production
and export of green hydrogen in Southland is
technically feasible and commercially sound.
Clean energy park partnership
with Ngāti Tūwharetoa
We entered a groundbreaking cooperation
agreement with Te Pae o Waimihia Trust this year
to develop a 45ha block in Tauhara into a clean
energy business park.
Contact sold the industrially zoned Raukanui Block
to Te Pae o Waimihia (TPOW), who will develop it
into a clean energy business community, offering
serviced sites for around 20 businesses working in
or alongside the renewable energy sector.
As part of the agreement, TPOW will give
preference to tenants who use geothermal energy,
or whose work is related to the geothermal
industry.
Energy use on site must be primarily low carbon
– geothermal, electricity or biomass. Contact has
exclusive rights to sell geothermal energy to the
tenants, as well as a right of first refusal on any
electricity supplies.
TPOW represents six Ngāti Tūwharetoa (Tauhara)
hapū, with more than 3,300 registered members.
It is involved in forestry and commercial property
developments for the benefit of hapū, including
providing employment opportunities, and grants for
health, education, kaumātua, housing and marae.
As well as rental income, the project will give
TPOW and hapū preferential investment and
employment opportunities with tenants, and
a hub for their own projects.
Representatives of Contact and Te Pae o Waimihia at the
He Ahi Clean Energy Park showcase.
For Contact, the project reinforces our
commitment to ensuring our operations benefit
Tauhara hapū. It aligns with our strategy to grow
demand through the supply of geothermal energy
and electricity, and contributes to our vision of
a better Aotearoa New Zealand by supporting
businesses in the renewable energy sector.
TNUE Limited, a Kiwi company that has developed
a control release membrane technology for urea
fertilisers, has signed up to be the first tenant in
the park. TNUE's innovative technology controls
the release of nitrogen in the soil, reducing the
loss of nitrates to groundwater and the
atmosphere. It has the potential to reduce
agricultural greenhouse gas emissions by
150,000 tonnes a year. TNUE's production process
requires significant heat which will be derived
from geothermal energy provided by Contact.
The sale to TPOW was completed in May and
the park is expected to be operating by mid 2023.
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Contact INTEGRATED REPORT 2022Strategic themes Grow renewable development
Material topics
Renewable energy supply
Generation emissions
Reliable energy supply
We’re developing new, flexible
renewable electricity generation to
help meet the massive anticipated
demand for reliable renewable
electricity as Aotearoa New Zealand
transitions away from fossil fuels.
This sort of demand makes the economics for
renewable energy developments, such as our
new power stations at Tauhara and Te Huka,
increasingly compelling.
Once we have completed and commissioned
Tauhara and subsequently closed our gas
fired Taranaki Combined Cycle plant, our total
renewable generation will increase to 95 percent.
We are also working with some of the best people
in the world on a pipeline of potential developments
in geothermal, wind and solar. We see an important
role for wind and solar in meeting long-term
demand for renewable electricity, alongside
geothermal and hydro, and our strategy is to
be a leading provider in meeting that demand.
As we work through the options for new renewable
energy developments, we will continue to work
closely with iwi, hapū and local communities,
and we will be sensitive to the impacts of our
operations on land, waterways and biodiversity.
In FY22, 87 percent of the energy Contact
generated came from renewable geothermal and
hydro sources, and the remainder from thermal
generation. This was approximately 20 percent of
Aotearoa New Zealand’s total electricity generation.
The Government is very clear about its desire to
decarbonise Aotearoa New Zealand’s electricity
production and there is strong appetite for new
renewables to be built and to displace thermal
generation.
We’re already seeing market demand for
renewable energy increase – for example, with
multiple data centre projects emerging, process
heat conversions ramping up, electric vehicles on
the roads and a strong appetite from industrial
users for long-term electricity supply deals.
Solid progress at Tauhara
We are making solid progress with the major build of
our Tauhara geothermal power station near Taupō.
The Tauhara power station is now expected to
generate 168 MW of renewable electricity, up from
152 MW when the investment was announced
in early 2021 – the result of the geothermal fluid
reservoir proving more productive than anticipated.
The project was designed with flexibility for a higher
generation capacity, and we now expect to deliver
to the full design potential.
Costs associated with the expansion in capacity, as
well as the Covid-19 pandemic, have increased the
overall costs of the development from the original
estimate of $678m to $818m.
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Preparing for the
future at Wairākei
We are preparing to modernise the way we
generate power on the Wairākei geothermal
steamfield through a project we are calling
‘GeoFuture’.
The Wairākei A and B stations opened in 1958
and 1961 respectively, and we’ve since added
the Poihipi Road, Wairākei binary and Te Mihi
power stations. Together, they generate enough
electricity for 380,000 homes.
We need to re-consent our Wairākei operations
by 2026. GeoFuture is about taking the
opportunity to listen and respond to hapū
and public feedback, protect and enhance the
environment, and make the best use of the
Wairākei geothermal reservoir to generate
reliable, low carbon, renewable electricity.
The original design of Wairākei A and B (the
world’s second-oldest geothermal power station
development) needed large volumes of water
from the Waikato River to cool the geothermal
steam after the turbine, with the design
resulting in the water and steam mixed directly
before being discharged back into the river.
As part of our commitment to reducing and
mitigating the impacts of our operations on the
natural environment, we have worked hard to
reduce discharge volumes and impacts on the
river – building the Wairākei bioreactor which
reduced hydrogen sulphide in the discharge
to the river by 98 percent, shifting generation
away from the river to our Te Mihi station, and
injecting more into the ground.
GeoFuture will provide the opportunity for us to
stop all discharges of geothermal and cooling
water from our power stations into the Waikato
River and streams.
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Progress on the turbine hall of Tauhara Power Station.
We plan to close Wairākei A and B no later than
June 2031 and build up to 180 MW of new power
stations at Te Mihi and a smaller 40 MW station
next to the existing Wairākei A and B stations.
These changes would increase the output of
renewable electricity from about 320 MW to up
to 380 MW – enough for 60,000 more homes.
Geothermal take would increase only marginally,
from 245,000 tonnes per day to 250,000 tonnes.
We engaged extensively before submitting our
consent application in December – we met with
local authorities, hapū and close neighbours,
we held public meetings, and invited local people
to take part in design thinking workshops and
ecological studies on the river. Our application
took into account the ideas and concerns we heard.
Waikato Regional Council received just seven
public submissions when our application was
notified – five neutral and two in support.
While we wait for the outcome of our consent
application, we are moving into the next phase
of refining the best technology and engineering
options within the proposed consent conditions.
We are also continuing to work collaboratively
with Wairākei hapū and Ngāti Tahu on cultural
impact assessments and proposed mitigations,
which will be part of the final consent.
The goal is to commission the replacement power
station before the current consents expire in 2026.
The expansion and Covid-19 headwinds, including
shortages of resources, will also delay the expected
completion by a few months – from the middle of
calendar year 2023 until the second half of 2023.
Despite the added complexity and challenges,
we are making excellent progress. We have some
of the best people in the world working on the
project. Our local and international contractors
have taken up the challenge and are working
collaboratively to enable good progress. We are
proud of what we are delivering under such
challenging circumstances.
Tauhara is a major strategic project for Contact
and for Aotearoa New Zealand, supporting our
transition to a low-carbon economy. It is expected
to replace 1.3 terawatt hours of thermal generation
from the country’s electricity system, displacing
450,000 tonnes per year of greenhouse gas
emissions. This is the equivalent of about one
million people flying return from Auckland to
Christchurch every year.
The project has been an opportunity to re-engage
with Tauhara hapū and to strengthen our
relationships, including working collaboratively for
the protection and restoration of natural resources,
and opportunities for training and employment.
Contact INTEGRATED REPORT 2022Strategic themes Building on our connection
with Western Energy
We’ve continued to build geothermal development
capability following the purchase of Western Energy
in April last year.
Advances in technology since Te Huka was
commissioned in 2010 mean the new 50 MW unit
will be about the same physical size as the existing
unit while also being 35 percent more efficient
at converting geothermal steam and water to
electricity.
Western is based in Taupō and provides geothermal
well services domestically and internationally.
Working closely with Western allows us to add
to our geothermal capability and continue to be
innovative in geothermal technology development.
Previously, Contact and Western Energy had
worked closely for more than five years and had
jointly developed innovation technology that
has materially lowered the cost of Contact’s
geothermal operations.
Western has continued to operate as a separate
company with its own management team and its
own governance structures to deliver on ambitious
growth plans, which complement our investment
to build renewable generation.
Increasing output at Te Huka
We have announced a $300m investment to
significantly increase the renewable energy
output from our Te Huka binary cycle power
station on the Tauhara geothermal steamfield,
with a new 51.4 MW power unit.
Commissioned 12 years ago, Te Huka was our first
development on the Tauhara field and delivers
around 26 MW of electricity to the grid.
Our new 51.4 MW power unit will make use of
existing, untapped production capacity in the
wells and the newly installed 33 kV line between
Te Huka and the Tauhara 220 kV switchyard.
This 33 kV line, built in partnership with Unison,
has unlocked the expansion of the plant which
was previously constrained with a lack of line
capacity to the Wairākei substation.
The development will use our existing consents for
the Tauhara geothermal steamfield, with a small
amount of additional consent work for earthworks
and air emissions. Although there is no formal
consenting process, we have been meeting with
neighbours to keep them informed, and to listen to
and address their concerns.
Progress on wind
We signed two landowner access agreements
this year for possible wind farm developments in
Northland and Southland – another major step
in our commitment to increasing renewable
generation.
If progressed, the total wind development pipeline
would generate approximately 600 MW across the
two regions.
The projects stem from the exclusive partnership
arrangement we signed in March 2021 with highly
regarded wind generation developers Roaring40s,
to develop a pipeline of flexible and low-cost wind
projects to complement our geothermal pipeline.
We have been using a wind monitoring mast to
assess the generation potential at the Northland
site, and will use that data to decide whether we
go to the next stage of seeking resource consent.
We are also continuing to build a pipeline of other
potential sites in Northland, Southland and across
the country.
We still have a lot of work to do around
assessments, consenting and construction, but
we expect our first wind generation assets to start
operating around 2027.
We see a big role for wind in meeting long-term
demand for renewable electricity in Aotearoa
New Zealand, and our strategy is to be a leading
provider in meeting that demand.
The founders of Roaring40s have been involved
in many of Aotearoa New Zealand’s existing wind
farms, and our six-year exclusive partnership gives
us a strong competitive advantage.
As the economics around wind technology
continue to improve, wind options will augment
our geothermal developments.
Joining forces on solar
We have entered an exciting 50/50 joint venture
(JV) with one of Europe’s largest solar developers,
Lightsource bp (LSbp), to develop a pipeline of
solar generation projects in Aotearoa New Zealand.
Contact and LSbp will collaborate on grid-scale
generation projects to create an initial 380 GWh of
clean, affordable electricity a year by 2026 – enough
to power 50,000 homes. There is also the option to
increase future generation output.
The JV will source, develop and construct solar
farm projects across the country, and Contact will
purchase the electricity generated via a long-term
power purchase agreement.
We expect to announce the JV’s first potential
development site in FY23 and begin electricity
generation by 2024.
The economics and benefits of solar developments
have been improving in recent years, as the
technology around grid-scale solar generation
has improved.
We’re looking forward to bringing these
opportunities to life with the LSbp team, which has
an impressive track record in delivering more than
5.4 gigawatts of utility scale solar projects across
17 countries.
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Contact INTEGRATED REPORT 2022Strategic themes Decarbonise
our portfolio
Material topics
Decarbonisation and electrification
Generation emissions
We’re decarbonising our portfolio of
generation assets (and the Aotearoa
New Zealand electricity market) via
an orderly transition to renewable
generation – managing the balance
between continued security of supply,
minimal emissions and affordability.
As part of our thought leadership on decarbonisation,
we released a report outlining proposals for an
industry-wide solution to manage the retirement
of thermal electricity generation in Aotearoa
New Zealand, and engaged extensively on the
proposal.
We’re exploring innovative new battery storage
options, to give more flexibility as the country
transitions to more intermittent renewables such
as wind and solar.
We are trialling geothermal carbon capture, and
continuing to invest in afforestation partnerships
on economically marginal land that help
Aotearoa New Zealand to meet its climate change
commitments through sequestration of carbon.
We will also see substantial decreases in carbon
emissions from our own portfolio following the
closure of our Te Rapa co-generation power station
in June 2023, and the gas-fired Taranaki Combined
Cycle (TCC) power station by the end of 2024 after
the geothermal power station at Tauhara has been
commissioned.
ThermalCo: taking the lead
on decarbonisation
We released a report in November outlining the
benefits of establishing an industry-wide, market-
based solution to manage the retirement of all thermal
electricity generation in Aotearoa New Zealand.
Our ‘Crafting a path for New Zealand’s 100%
renewable electricity market' report focused
on how we can expedite the transition away
from electricity generated from fossil fuels,
without disrupting the secure, affordable
supply of electricity to New Zealanders.
Aotearoa New Zealand currently relies on thermal
electricity generation from gas, coal and diesel
during periods of peak demand or when there is
insufficient water, wind and sun to meet demand
from renewable sources.
Our report proposed setting up an industry-wide
entity, with appropriate competition protections,
which could own, operate and retire all of the
country’s major thermal generation assets as
new renewable generation is built.
The entity, which we’ve called ‘ThermalCo’, would
ensure a smooth and efficient transition away from
thermal generation, reducing greenhouse gas
emissions into the atmosphere by 1.2 million tonnes
a year by 2030 – about 1.5 percent of Aotearoa
New Zealand’s greenhouse gas emissions (based
on 2020 data).
Since releasing our report, we’ve been talking
with other thermal generators, gas suppliers,
government agencies and regulators to share
our vision and hear feedback.
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Contact INTEGRATED REPORT 2022Strategic themes CASE STUDY
New forestry investment
fund partnership
We entered a new afforestation partnership
called Forest Partners with Genesis Energy,
Z Energy and Todd Corporation this year.
Contact will put $37.5 million into the
partnership over five years, for planting on
land that would otherwise be economically
marginal and difficult to farm.
Forest Partners is about putting ‘the right
trees in the right places’, in partnership with
rural communities.
It’s a similar approach to our existing
partnership in Drylandcarbon – with Air
New Zealand, Genesis Energy and Z Energy.
We made our final capital contribution into
Drylandcarbon this year.
The Forest Partnerships fund is designed to
provide a long-term supply of high-quality
carbon credits for the four investors, as well
as high-quality timber for the domestic and
international market.
Forest Partners seeks to be a distinctive and
ethical operator in the Aotearoa New Zealand
forestry market, with a commitment to farmers
and rural communities. It believes that on the
right land, responsible rotation forestry can
be complementary to farming operations.
On steeper and more economically marginal
backcountry land, rotation forestry for timber
and carbon credits can provide significant,
reliable, intergenerational income to support
farming families.
We are continuing to provide thought leadership
to stimulate meaningful discussion on the
transition away from thermal energy generation.
Getting the transition towards a fully renewable
electricity system right could unlock a significant
opportunity for Aotearoa New Zealand with
benefits for the environment, people, businesses
and communities.
Grid-connected battery option
We are continuing to explore ways to provide
more flexibility to the grid, including the potential
development of a 100 MW battery at Stratford in
Taranaki.
In May this year we lodged a resource consent
application for the battery, which would be the
first of its kind in Aotearoa New Zealand.
Although new to Aotearoa New Zealand, the
cutting-edge technology has been proven
internationally and could play a vital role in
the country’s transition away from reliance
on thermal energy generation.
Large-scale batteries could offer ongoing flexibility
to the grid, reducing reliance on fossil fuels as
thermal generation is replaced by intermittent
wind and solar generation. Based on the past
12 months of operations at our gas peaker plant,
the Stratford battery is expected to avoid around
13,500 tonnes of greenhouse gas emissions each year.
The outcome of our resource consent application
is expected early in FY23.
The battery would be housed in up to 50 shipping
containers spread over an area about the size of
a rugby field. It would take around 18 months to
construct.
Exploring carbon capture
Although geothermal generation is renewable –
using steam released from water that is naturally
heated in the earth – the process releases relatively
small amounts of embedded carbon into the
atmosphere.
As part of our strategy to lead Aotearoa New Zealand’s
decarbonisation, we have commenced a trial at
our Te Huka geothermal site, exploring how we
can capture emissions from geothermal energy
production and inject them back into the earth.
While each geothermal plant is different and would
need different approaches to capture and inject
emissions, it is an exciting trial and an important
part of our commitment to decarbonisation.
Te Rapa power station closure
We announced in June that we will close our
Te Rapa power station next year, reducing our
annual carbon emissions by 200,000 tonnes a year.
The 44 megawatt gas-powered station provides
electricity and steam for Fonterra's nearby dairy
factory, with surplus power sent to the grid.
The station will close in June 2023, when our
current supply agreement with Fonterra expires.
Fonterra will acquire the plant's boiler to produce
steam for their processes beyond next June, and
the gas turbine at the power station will be retired.
The closure is in line with our strategy to decarbonise
our business and Aotearoa New Zealand. It will
reduce Contact's long-term carbon emissions by
20 percent.
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Contact INTEGRATED REPORT 2022Strategic themes Creating outstanding
customer experiences
Material topics
Energy hardship and affordability
Customer trust
We’re creating outstanding customer
experiences as we build Aotearoa
New Zealand’s leading energy and
services brand. We know we play a vital
role for hundreds of thousands of homes
and businesses that rely on the electricity,
gas and broadband that we supply.
We think home is the most important place in the
world, and our aspiration is to improve the quality
of home life for New Zealanders – within the four
walls that each of us calls home, and our collective
home of Aotearoa New Zealand.
To do this, we listen to our customers and align our
services with what matters to them – including
providing plans that are accessible, value for
money, give price-certainty, and help customers
to reduce their carbon footprint.
We are also reimagining our services to ensure
we deliver value, while balancing impacts on the
environment and helping people at critical times
in their lives. This led to two major innovations in
FY22 – our Good Nights plan offering three hours
of free night-time power to all customers, and Fourth
Trimester offering three months of free power to more
than 1,000 families with newborns. Both initiatives
have been unmatched by competitors and have
positively differentiated Contact in the energy market.
We’re also committed to the wellbeing of our
customers, including those most vulnerable to energy
hardship. We’re using a range of tools and payment
options to help customers who are struggling to keep
their lights on and their homes warm and connected,
and we’re achieving great results in helping
customers stay connected and out of debt.
We’re actively looking at further ways we can
help our most vulnerable Kiwis to stay warm and
connected at home, to help improve the quality
of home life for all New Zealanders.
We were recognised by consumers in the
NZ Compare Awards – taking out four awards for:
Best Customer Support – Power; Best Mobile
Application; Power Provider of the Year; and the
Supreme Champion Award across Broadband
and Power.
We were proud to be awarded Energy Retailer of
the Year at the New Zealand Energy Excellence
Awards in June.
According to the Electricity Market Information
(EMI) database, Contact saw the largest organic
annual growth in customer connections in FY22.
This measures all data for the industry to accurately
report on the performance of electricity retailers.
These sorts of awards and recognition demonstrate
that we’re on the right track with providing
products and services that New Zealanders want.
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Contact INTEGRATED REPORT 2022Strategic themes Fair and competitive pricing
Wholesale energy and network prices increased
this year and are expected to keep increasing in
the short to medium term.
In line with our pricing principles, we’ve shielded
customers from the full impact of the wholesale
price increases – which helps customers, while
also helping us to stay competitive in a highly
contested market, and keep growing our retail
business. On average our customers’ electricity
pricing increased 1.3 percent this year.
Our pricing principles balance being fair to our
customers, remaining competitive in the market,
and being disciplined about cost recovery so that
we can continue to grow, invest in innovative
products and services for customers, and deliver
returns for shareholders.
Customer satisfaction and growth
Our commitment to better products and experiences
for our customers, fair prices, and our new brand
positioning and campaigns, paid off with significant
growth in customer satisfaction, retention and
acquisition.
We introduced a Voice of the Customer programme
using new technology to get faster and more detailed
insights from customer interactions and to help
uncover opportunities for experience improvements.
We constantly monitor progress, and have seen
improvements in customer satisfaction.
More than 67 percent of our customers say they are
satisfied with Contact and 79 percent say Contact
is easy to deal with.
Our Net Promoter Score (the number of customers
who say they would recommend us, versus those
who wouldn’t) increased significantly again this
year from +31 to +39.
High customer satisfaction showed up in our low
electricity switch rate (which measures properties
switching away from Contact) of 15 percent,
which was 4 percent below the market average.
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We had a 9 percent increase in our total energy
and broadband connections from 523,000 to
573,000.
Electricity and gas connections were up from
470,000 to 502,000 – helped significantly by
the introduction of our popular Good Nights
power plan.
We remain one of Aotearoa New Zealand’s fastest
growing broadband providers. Our broadband
connections increased from 50,600 to 70,800, even
with the challenges of a modem shortage caused
by supply chain disruptions. We initially put new
broadband connections on hold in March until we
could secure more modems, rather than signing up
customers who would face unreasonable wait times.
Our team then turned the challenge into an
opportunity, offering a ‘bring your own device’
option, so customers could sign up if they already
owned a modem, with the added benefits of
quicker connection and less waste.
We’ve had modems back in stock since May but,
given the success of the BYO option, we’re now
giving customers the choice to receive a new
modem, or bring their own.
It’s good to be home
Our purpose is to build a better Aotearoa
New Zealand and this year we’ve looked at
how we’re bringing our purpose to life across
our entire business.
We believe that ‘home’ is the best place in the
world. So, we’re focusing our energy on making
Aotearoa New Zealand better by improving
the quality of home life for all New Zealanders.
In short, we’re working to ensure ‘It’s good to
be home’.
New Zealanders will increasingly see how Contact
ensures ‘It’s good to be home’ through the great
customer experiences, products and services we
deliver to help customers improve their home lives,
and also through the impact we’re having on our
shared home, Aotearoa New Zealand.
We’re already improving the quality of home life for
our customers through initiatives such as Fourth
Trimester (providing three months of free power
to families with newborns), Good Nights (providing
three free hours of power a night), helping customers
use energy better, and the options and support we
provide to customers experiencing hardship.
We’re also making the quality of our collective
home better for all New Zealanders through
renewable energy developments such as our
new Tauhara and Te Huka geothermal stations,
investment in wind and solar, environmental
protection and restoration.
‘It’s good to be home’ is a brand commitment
and much more. It provides an overarching
platform for why we do what we do, which sets
us apart from our competitors. Businesses have
a moral responsibility to look after communities,
the environment and people and ‘It’s good to be
home’ demonstrates our intention to do more in
these areas, improving the quality of home life for
all New Zealanders.
Contact INTEGRATED REPORT 2022Strategic themes Offering customers Good Nights
We’ve had a fantastic response to our new power
plan, Good Nights, which is helping thousands of
Kiwi families to be warmer, healthier and happier
when they’re home at night.
Launched in August 2021, Good Nights offers
three hours of free power every night, between
9pm and midnight. It means customers can keep
their homes warm at night, or use the drier to
get clothes dry for school the next day – without
worrying about hefty power bills.
Around 29,000 customers have signed up, including
around 20,000 new customers. One in three of
our Good Nights customers have taken up multi-
product offers to include their broadband and/or
gas as well.
Customers have told us they love the plan because
it’s flexible, helps them keep power bills down, and
helps them understand how they use their energy.
Aotearoa New Zealand is also better off if more
customers shift to using high-energy appliances
at off-peak times. Usage peaks cause significant
issues for our national grid, and are the times
when Aotearoa New Zealand uses the most
non-renewable power (coal, gas and diesel).
Good Nights will help flatten those peaks and
contribute to more sustainable energy being
used. We are already seeing 29 percent of
existing customers on the Good Nights plan
shifting more of their energy use to off-peak times.
Good Nights is one small step in what Contact has
in store for creating plans for customers that are
better for the environment, for homes, people and
Aotearoa New Zealand.
Fourth Trimester support
for families
We helped more than 1,000 Kiwi families when
they needed it most with three months of free
power during their ‘Fourth Trimester’ – giving a
massive two million hours of free power.
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Energy credits
We helped 2,956 customers who were experiencing
financial hardship by crediting their accounts
this year.
The credits largely helped customers who were
struggling because of Covid-19. Some had not been
paid while they were unable to work, or their bills
were higher while family were isolating or schools
were closed.
Our team have discretion to credit customers who
tell us they’re struggling, and to determine the size of
each credit based on the customer’s circumstances.
Many of the families we helped were facing
multiple challenges – with energy bills, other
utilities, rent or mortgage payments and groceries.
The credits meant they could keep their power on
and cover other costs too.
The total value of credits increased from around
$250,000 in FY21 to just over $350,000 this year.
Managing customer debt
We disconnect customers only as an absolute last
resort. We stop all disconnections during extreme
weather events or times of emergency, which
included Covid-19 lockdown periods this year.
We disconnected on average 0.2 percent of
customers in FY22, down from 0.78 percent in FY21.
We work hard to help customers who are
disconnected get reconnected quickly. In FY22
we reconnected 49 percent of customers within
24 hours compared to 53 percent in FY21.
Over the final quarter of FY22 the average debt
balance at disconnection was $504, reducing
8 percent from $549 for the same period in FY21.
Lower debt balances enable quicker reconnections
as customers need to pay a smaller amount to be
reconnected. Only 269 residential customers were
disconnected for longer than 24 hours. Our net bad
debt write-offs were $1.3 million, compared with
$1.6 million last year.
We know it takes a lot of energy to raise a newborn
– warm baths, daily washing cycles, and cleaning
everything in sight. We can’t help our customers
with babies’ sleep patterns, but we can help them
with the energy to keep them and their families
warm and healthy.
In March, we invited existing customers with (or
expecting) newborn babies to receive a Fourth
Trimester of free power. Within 24 hours and
48 minutes, customers snapped up all 1,000 spots.
To add some extra surprise and delight, we sent
each of our Fourth Trimester families a onesie for
their newborn, with messages like “I can pay my
power bill with my eyes closed” and “Eats, sleeps,
poops, and pays the power bills”.
We trialled Fourth Trimester with 1,000 customers
to ensure they had a great experience before we
consider rolling it out again to more Kiwi families.
Fourth Trimester provides a real demonstration
of how we improve the quality of home-life for
New Zealanders – including our smallest and
newest New Zealanders.
Contact INTEGRATED REPORT 2022Strategic themes Supporting customer wellbeing
We know we have an important role to help
those most in need to keep their lights on and
their homes warm and connected. It’s part of our
commitment to customer wellbeing, and ensuring
all New Zealanders can enjoy a good quality of
home life.
We’ve established an Energy Wellbeing Team to
work with customers, community groups and
industry to address the complex challenges of
energy wellbeing, and we provide a raft of support
and options for existing and prospective customers
who are struggling.
We encourage customers to get in touch if they’re
struggling to pay their bill, and we use a range
of tools and payment options to help them.
This includes checking on their welfare and that
they’re on the right plan, helping with referrals
to other support agencies, offering different
payment options such as PrePay, and discretionary
fee waivers or other financial support in cases of
hardship.
We also have comprehensive credit reporting,
which ensures we consider good payment
behaviour alongside any missed payments.
For example, we may take on a customer who
has an unpaid bill from several years ago but has
since paid all their bills on time. Customers who
fail a credit check are all still able to use PrePay.
We accepted 98 percent of all customers who
applied for accounts, with many of those who were
unable to qualify for post-pay accounts opting for
PrePay.
More than 5,100 customers have now chosen
weekly or fortnightly payment plans to smooth out
their payments and align due dates with pay days,
and a similar number are on PrePay.
While customers are on PrePay, they can pay off
debt at a rate they can afford, with no interest or
fees, and can access most of the same products,
prices, discounts and rewards as other customers.
Working collaboratively
for customer wellbeing
Our Energy Wellness Team referred at least
140 customers for Work and Income support and
assisted many more customers with referrals to
FinCap budgeting services, EnergyMate in-house
energy coaching, and other community agencies.
We did not track all referrals in FY22 but will do
for FY23.
We’re proud to fund EnergyMate as part of our
membership with ERANZ (Electricity Retailers’
Association of New Zealand) alongside other
electricity retailers, lines companies, and the Energy
Efficiency and Conservation Authority (EECA).
EnergyMate coaches, from grassroots community
organisations, visit households to help them look at
how they’re using power, find ways to save money,
and work out if they’re on the right plan. They help
households build an action plan to save power
and keep their home warm, and can also connect
them with other agencies to help address drivers
of energy hardship.
At the 2022 NZ Energy Excellence Awards,
EnergyMate won the Outcomes Award, which
celebrates the delivery of accessible and inclusive
energy solutions.
The industry has also announced a new $5 million,
5-year energy credit scheme, to support low power
users when low fixed user charges are phased
out. The low fixed user charge is being stopped
as a result of the Government’s 2019 Electricity
Pricing Review, which found that they were poorly
targeted and could worsen energy hardship
for some households while increasing pricing
complexity and confusion. The industry has agreed
to fund the credit scheme to help vulnerable Kiwis
who are materially impacted by the change.
There are complex factors at play in energy
hardship and we know Contact has an important
role to help those who are most vulnerable,
alongside others in our industry, other sectors,
and the Government.
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Contact INTEGRATED REPORT 2022Strategic themes Strategic
enablers
Contact
Contact
INTEGRATED
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Progress against strategic enabler metrics
One year into execution we are making good progress
Complete/On-track
Minor delay
Major delay
Strategic theme Target
Material theme Indicators/activities
FY22 result
Environment
Reduce Scope 1 and 2 GHG emissions 45% by 2026
compared to a 2018 base year
GHG emissions
Emissions from generation
Reduction of 393 kT CO2e
(reduced 33%)
Reduce Scope 1 GHG emissions 37% per MWh by 2030
compared to a 2018 base year
Emissions intensity from
generation
Reduction of 0.094 TCO2e /
MWh (reduced 31%)
Significantly reduce operational discharges of geothermal
fluid to Waikato River by 2026
Water
Geothermal fluid discharge
to awa (rivers)
30,761ML (reduced 3,797ML
from FY21)
Plant 100,000 native trees around our generation sites by 2024 Biodiversity
Number of trees planted
55,206
Number of initiatives
2
Social
Support 100 community initiatives and organisations
each year
Community
wellbeing
Number of community
organisations supported
111 initiatives supported
50% of customers disconnected for debt reconnected
within 24 hours
Sign up 96% of new customers, not discriminating
due to credit history
Energy hardship
Percentage reconnected
49% reconnected
Percentage of customers
accepted
98% signed up
Committed to understanding and removing modern
slavery from our supply chain
Sustainable
procurement
Governance outlined in code of conduct and policies and
current suppliers being reviewed
Ensure all Contact employees and contractors are paid
a fair and equitable wage
Pay equity is monitored and
reported on
Permanent employee gender
pay equity 95.2%
Governance
Minimum of 40:60 female:male gender split through all levels of
our company
Diversity and inclusion Gender split
Not yet embedded at all levels
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Operational
excellence
Transformative
ways of
working
Ensure no bias in recruiting procedures
Implemented requirement for diverse interview panels,
we advertise roles in both Te Reo and English and continue
to identify unconscious bias and then seek to eliminate it
Maintain Rainbow Tick accreditation
Inclusion
Retained accreditation
Certify all debt as green
Sustainable finance
Percentage green debt
100%
Continuously improve operations through innovation
and digitisation
Digital capability
69% digital interactions FY22/
73% in June 22
Create a flexible and high-performing environment
for Aotearoa New Zealand’s top talent
Creating better workspaces
New purpose-designed
workspace opened in Auckland
Shaping our Contact
Community
Launched leadership pathways
in Contact University
Contact University
> 12,000 courses completed
Contact INTEGRATED REPORT 2022Strategic enablers
Environment, social
and governance
Material topics:
Generation emissions
Tangata whenua partnerships
Freshwater system health
Biodiversity protection and restoration
Community wellbeing
Climate change impact on assets
Environmental pollution
Sustainable procurement
Natural resource protection
Environment, social and governance
(ESG) outcomes are built into our DNA
at Contact.
This starts with our purpose to create a better
Aotearoa New Zealand, our Tikanga (our
commitment to being a responsible organisation),
and our reliance on natural resources, good people
and strong communities to sustain our operations.
We know that our families, our teams and our
communities expect us to be good corporate citizens,
and that investors are increasingly considering
sustainability-based measures alongside traditional
financial measures, when assessing a company’s
performance.
Although ESG factors are labelled non-financial,
they have measurable financial consequences
in terms of things like access to capital, risk and
reputation management and efficiency. Strong
ESG credentials help us create long-term value.
ESG at Contact includes our market-leading
efforts around decarbonisation, renewable energy
development, science-based emissions targets,
greenhouse gas reporting, diversity and inclusion,
environmental management and sustainability-
linked finance.
It means being a good neighbour in the
communities that we are part of. We also partner
with tangata whenua in the regions where we
operate. We supported 111 community initiatives
this year and entered a major new partnership
with Women’s Refuge.
ESG also means valuing our customers, giving
them access to affordable and reliable electricity,
treating them fairly and ensuring their needs are
met. That includes new plans like Good Nights
and Fourth Trimester, the support we provide
for customers experiencing hardship, and our
customer pricing principles (which include
making sure that prices paid by new customers
and existing customers are never far apart).
For our Contact people, it’s about being a fair and
equitable workplace where people are proud to work.
We were the first company in Aotearoa New Zealand
to sign up as a supporter of the Task Force on
Climate-related Financial Disclosures. We continue
to use their approach to guide our climate-related
reporting.
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Contact INTEGRATED REPORT 2022Strategic enablers Reducing greenhouse gas emissions
The Contact26 strategy is grounded in a sustained,
conscious effort to lead decarbonisation for
Aotearoa New Zealand. That means cutting
greenhouse gas emissions from our own operations,
and helping our customers to cut theirs.
This includes our investment in new geothermal
energy generation, including our major Tauhara
geothermal power station development, as well
as potential solar and wind projects, and plans
to close our Te Rapa power station and Taranaki
Combined Cycle Plant.
It includes our carbon capture trial at Te Huka
geothermal power station, the work that Simply
Energy does to offer options to industry customers
to reduce their thermal energy consumption and
carbon footprints, and our thought leadership on
the retirement of thermal electricity generation,
with our ‘Crafting a path for New Zealand’s
100% renewable electricity market’ report.
We also take an active role in leading on
decarbonisation as a member of Aotearoa
New Zealand’s Climate Leaders Coalition, and this
year we signed the Coalition’s new Statement
of Ambition, which reflects signatories’ desire to
be climate leaders as science and policy evolve.
The Coalition’s purpose is to build momentum
towards a zero-carbon future. Members collectively
account for almost 60 percent of Aotearoa
New Zealand’s gross emissions and around
38 percent of GDP.
Emissions from electricity generation (tCO2e)
1,250,000
1,000,000
750,000
500,000
250,000
0
8
1
Y
F
9
1
Y
F
0
2
Y
F
1
2
Y
F
2
2
Y
F
Total greenhouse gas emissions by Scope
(tCO2e) for Contact, Simply Energy and
Western Energy FY22
66.5%
Scope 1
33.4%
Scope 3
0.1%
Scope 2
Scope 1 – produced directly through our operations
Scope 2 – emissions from purchased electricity
Scope 3 – emissions in our wider supply chain
Our science-based targets
We have committed to ambitious climate change
targets aligned with the goal of limiting global
warming to 1.5 degrees Celsius, approved by the
Science Based Targets Initiative (SBTI).
We measure and report on our Group emissions
using the Greenhouse Gas Protocol. Scope 1
emissions are direct emissions from our operations,
Scope 2 emissions are from the purchase and use
of electricity, and Scope 3 emissions are created
throughout our supply chain.
Our Group commitments are to:
• reduce absolute Scope 1 and 2 emissions
45 percent by 2026 from a 2018 base year
• reduce absolute Scope 1 and Scope 3 emissions
from all sold electricity 45 percent by 2026 from
a 2018 base year
• reduce Scope 3 emissions from use of sold
products 34 percent by 2026 from a 2018 base year.
We plan to achieve these targets by displacing
thermal generation with low-carbon renewable
generation. The construction of our Tauhara
geothermal power station will play a significant
role, which should enable us to close our Taranaki
Combined Cycle power station after Tauhara has
been commissioned.
In FY22 our Scope 1 and 2 emissions were
25 percent lower than the previous year.
This was due to lower levels of thermal generation
in FY22 when compared to FY21. Compared to our
2018 base year, our Scope 1 and 2 emissions were
33 percent lower in FY22.
Our Scope 3 emissions decreased year-on-year by
26 percent, mainly as a result of a reduction in use
of our swaption with Huntly power station.
Further detail on our emissions is in the Sustainability
disclosures or in our greenhouse gas inventory
report.
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Contact INTEGRATED REPORT 2022Strategic enablers Where possible, external datasets (such as the
Climate Change Commission’s scenarios and
Transpower’s Whakamana i Te Mauri Hiko work)
have been used.
The modelling shows that under all three scenarios
Contact’s sales, generation and EBITDAF1 continue
to grow. Contact’s sales, generation and EBITDAF
grow the most in Scenario 1, while Scenario 3
shows the lowest growth.
While EBITDAF grows even under Scenario 3,
climate change is likely to have other impacts on
the Contact business model such as increased risk
and volatility. It is also likely to have other costs that
are not captured through this scenario modelling.
The most positive climate scenario, Scenario 1,
is also the most favourable for decarbonising
Aotearoa New Zealand’s economy. This supports
the current Contact26 strategy, especially the
three strategic themes of ‘Grow Demand’, ‘Grow
Renewable Development’ and ‘Decarbonise our
Portfolio’.
We have more on our climate-related risks and
opportunities in our sustainability disclosures.
Leading on sustainable finance
We were the first company in Aotearoa New Zealand
to establish a green borrowing programme in 2017
and we continue to be a market leader in sustainable
finance.
All our bank loans are now sustainability-linked,
after the conversion of our remaining $305 million
of bank facilities, across five banks, in June 2021.
Our sustainability-linked loans currently total $430m.
In November 2021 we issued Aotearoa New Zealand’s
first certified green capital bond. The $225 million
bond won the award for ‘New Zealand Debt Market
Issue of the Year’ at the INFINZ (Institute of Finance
Professionals NZ) Awards and 'New Zealand Dollar
Credit Bond Deal of the Year' at the KangaNews
Awards. This market-leading bond issue showed
strong links to Contact’s renewable strategy and has
paved the way for further green capital bond issues
in Aotearoa New Zealand since.
We are developing a new sustainable finance
framework, which will be issued in FY23 and will
encompass our green bonds and sustainability-
linked loans as well as broadening our existing
framework to allow potential sustainably-linked
bond issues, ensuring we remain market leaders.
Financial implications
of climate change
We reviewed and updated our scenario analysis
this year to further understand the financial
implications of climate-related risk on our business.
Our revised analysis was based on the
recommended TCFD disclosure to describe the
resilience of the organisation’s strategy, taking into
consideration different climate-related scenarios,
including a 2 degrees celsius or lower scenario.
To do this, we developed three scenarios:
• Scenario 1: The world pulls out all the stops and
maintains a global temperature increase of 1.5°C
• Scenario 2: The world has some success in
holding the global temperature increase
between 2°C and 4°C
• Scenario 3: The global temperature increase
goes beyond 4°C.
We took a top-down approach to develop each
scenario from:
• What is happening around climate change
action at a global level; to
• What is happening around climate change
at the Aotearoa New Zealand level; to
• The impacts on energy markets in Aotearoa
New Zealand; and finally
• The impacts on Contact’s business model
and strategy.
Under each scenario, more than 30 variables are
changed across 30 years. These include population
growth, carbon price, process heat electrification
and electric vehicle uptake. This provides a range
of outcomes under which Contact’s strategy can
be assessed.
1 EBITDAF is a non-GAAP (generally accepted accounting practice) measure. Information regarding the usefulness, calculation and reconciliation of this measure is provided within note A2 to the financial statements.
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Contact INTEGRATED REPORT 2022Strategic enablers A sustainable approach
to procurement
We purchase a wide variety of goods and services
to help us maintain our power stations, support
our customers, and enable the running of our
offices and overall business. We have around 2,000
suppliers, and about 5 percent are offshore.
This year one of our goals has been to develop
a business-wide approach to sustainable
procurement. We have developed a sustainable
procurement framework that has been incorporated
into our business decision-making when we procure
goods and services from suppliers.
We’re working to build enduring partnerships that
respect tangata whenua, their relationship with
Aotearoa New Zealand’s natural resources, and
the imperative of kaitiakitanga.
We are committed to supporting tangata whenua
in their aspirations, and with the resources and
advice they need to engage with Contact or our
resource consent processes, and we look for
meaningful opportunities to contribute to their
wellbeing and prosperity.
We are working closely in partnership with Ngāi
Tahu. This year we have signed a relationship
agreement to jointly explore new development
opportunities in the South Island.
The framework enables us to identify and manage
risks in our supply chain, including modern slavery,
and allows us to directly work with suppliers when
necessary to help them align their sustainability
journey with our goals.
We have also entered into a ground-breaking
agreement with Te Pae o Waimihia Trust to
develop a 45ha block in Tauhara into a clean
energy business park, and our Ka Hiko ai te iwi
training and employment programme.
Data on supply chain impacts is in our Sustainability
Disclosures.
Partnering with tangata whenua
We aim to work openly and collaboratively with
tangata whenua, consistent with our Tikanga, and
the partnership principles of Te Tiriti o Waitangi.
We acknowledge the enduring relationship that
tangata whenua have with the land and natural
resources and that working closely with them
benefits our communities, our business, and
Aotearoa New Zealand.
While consent processes require us to engage,
listen, and build the concerns and aspirations of
hapū into our mitigation measures, we aim to
go beyond compliance. We recognise that our
business depends on Aotearoa New Zealand’s
natural resources – taonga that have been central
to the lives of tangata whenua and provided for
iwi and hapū for hundreds of years.
Ka Hiko ai te iwi, meaning ‘Future Power of the
People', has been developed to provide Tauhara
hapū with more opportunities for their whānau
to gain employment through our new Tauhara
power station.
Since launching Ka Hiko in August 2021, 36 ākonga/
trainees have completed pre-trade training
courses. Of those, 23 are now working across three
separate construction sites with nine different
contractors. Some of these ākonga have been
offered apprenticeships and others have taken
on long-term employment opportunities. Three
ākonga have moved into mahi or apprenticeships
with contractors outside the project. All ākonga
are supported through our pastoral care to ensure
a positive start in the construction industry.
We are pleased that 30 of the ākonga whakapapa
to Tauhara hapū, Ngāti Tuwharetoa or other
tangata whenua. Recruitment relies on our existing
relationships and ongoing engagement with hapū,
iwi and hapori whānui/wider community.
Planning is currently underway to expand Ka Hiko,
to potentially grow into other Contact projects and
mahi over the next ten years.
To grow tangata whenua capability in our sector,
we also supported a collective iwi initiative amongst
Tuwharetoa, Ngāti Tahu and Te Arawa to enable six
post graduate students to travel to Iceland in July
2022 to attend the Energy Summer School, focused
on sustainable energy and renewable technologies.
Being a good neighbour
Our community ethos is about ‘being the
neighbour you’d want to have’. That means
building relationships with our neighbours,
listening to their concerns, and looking for ways
to help where we can. Help could take the form of
sharing our skills and knowledge, volunteering our
time, or community sponsorships and donations.
Our approach is to invest locally in issues that matter
to our people and our communities. Each of our sites
has a community engagement plan, which identifies
key stakeholders and how we will engage with
them, and how we’ll support our local communities
through partnerships and sponsorships.
We have a volunteer programme called Community
Contact, so our people can volunteer with local
initiatives that they care about. Each Contact site
also has a community sponsorship budget to spend
on grassroots community initiatives.
This year we spent $714,054 in the community
and supported 111 initiatives through sponsorship,
donations and partnerships. Our people spent
474 hours volunteering with 17 organisations
in their communities.
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Contact INTEGRATED REPORT 2022Strategic enablers New partnership with
Women's Refuge
In June 2022 we partnered with the National
Collective of Independent Women’s Refuges
(Women’s Refuge) for a two-and-a-half-year
sponsorship.
We recognise that “It’s good to be home” is not
a reality for all New Zealanders and this newly
formed partnership recognises the responsibility
we have towards building a better Aotearoa
New Zealand for all New Zealanders.
Our contribution will include:
• free electricity for 40 Women’s Refuges and
40 safe houses across Aotearoa New Zealand
for 2.5 years;
• sponsorship and promotion of Women’s Refuge
fundraisers in 2022, 2023 and 2024;
• support for on-the-ground research in 2022
and 2023; and
• ad hoc opportunities to support Women’s
Refuge through fundraisers inside Contact.
Every night in Aotearoa New Zealand more than
200 women and children need a safe place to
escape to. We respect the important, tough and
sometimes gritty work that the Women's Refuge
team does across the country, and it’s fantastic to
be supporting this work.
The new partnership is aligned with our Tikanga
and we are building on good foundations with
Women's Refuge over the past couple of years,
which has included:
• providing 70 Women’s Refuge properties with
three months of free power during the first
Covid-19 lockdown;
• donating $50,000 to the Safe Night-a-thon
fundraising campaign as part of our Good Nights
pricing plan launch;
• adding ‘Shielded’ functionality to our website
to allow victims of domestic violence to see
information about how they can get help without
leaving a trail for an abusive partner to see; and
• choosing Women’s Refuge to receive $30,000 as
part of our team vaccination campaign. For each
Contact team member double-vaccinated we
donated $100, adding up to $90,000 which we
shared between Women’s Refuge, I AM HOPE
and Plunket.
We worked with the Women's Refuge and other
sponsors on their new fundraising campaign,
The Great Night In, in July 2022. This saw Contact
match 'safe night' donations from Kiwis to the tune
of $100,000. We also committed to match every
$20 donated by our people with $80, bringing the
total to $100.
Every $20 donated to Women’s Refuge provides
one safe night for a family.
We are looking forward to doing meaningful
things together over the next few years. It’s one
small way that we can help make it good to be
home for more Kiwi families.
Win-win pool partnership
in Central Otago
This year, Contact pledged $95,000 to buy and
install solar panels at the Roxburgh Community
Summer Pool. The money was originally intended
for the Contact Epic and Blossom Festival events,
which were cancelled due to Covid-19.
When the pool is not open during the winter
months Simply Energy will sell the excess energy
from the solar panels back to the grid, with
the profits gifted back to the pool. It's a win/
win opportunity for the community and the
environment.
Simply will look after an ongoing billing and
metering system which will enable the pool to
use the solar output over the summer and sell it
over winter. This also means that for the life of the
system, the community will receive significantly
reduced admission costs to the pool.
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We love supporting community programmes such
as SwimWell Taupō.
Moving the system to solar will save 24.7 tonnes
of greenhouse gas emissions a year – equivalent
to the emissions from 1,741 one-way trips between
Roxburgh and Queenstown in a petrol-powered car.
Our Central Otago hydro team also put their
community sponsorship funds towards a diverse
mix of important local projects, including:
• Two heat pumps for the Lake Hāwea Community
Centre, meaning the centre’s basement can be
heated and used by the Kahu Youth Trust.
• Supporting the Haehaeata Natural Heritage
Trust to propagate and grow native plants, which
they then provide to other local organisations for
planting. Our people are also looking at future
volunteering opportunities with the Trust.
• Replacing a skylight at the Kopuwai Early
Learning Centre to help improve airflow in the
nappy changing area.
• Sponsoring a weekly ‘Top 40’ on two community
radio stations, Radio Central in Alexandra and Radio
Wanaka, to show our support for community radio
when Covid-19 was impacting their viability.
• Providing the prize for ‘the last duck’ at the
Alexandra District Parents Centre’s annual duck
race down the Manuherekia River.
Contact INTEGRATED REPORT 2022Strategic enablers
Helping grassroots groups in Taupō
Contact has had a significant presence in the Taupō
community since the Wairākei A and B power
stations opened 60 years ago. This has only increased
with the development of our new Tauhara power
station, and we are continuing to look to do more.
This year we continued our long-standing sponsorship
of SwimWell Taupō, which gives every school-aged
child in the district access to free swimming and
water safety lessons. Our support enables more
than 25,000 swimming and water safety lessons
to be delivered to 3,500 children every year.
We also use the land we operate on in Taupō to
benefit the community. As well as leasing land not
used for electricity generation to farmers, we offer
it to community organisations that align with our
Tikanga and need land to operate, including Riding
for Disabled and the SPCA.
We supported diverse grassroots community
groups and initiatives from our Wairākei
community sponsorship fund, including:
• Age Concern Taupō for postage costs, to help get
information to older people in the community
• Taupō Family Playcentre to replace bark in their
playground, to keep children safe
• Taupo-nui-a-Tia College to help start a school
radio station, and for hockey equipment
• Volunteer Great Lake Taupō to buy computer
equipment for a volunteering hub
• Taupō Squash Club to buy equipment to get
more women and girls participating in squash
• Lake Taupō District Sports Advisory Council to
buy gear bags for the girls’ coaching programme,
to help more girls play cricket
• Thrive Whakapuawai to fund a field worker in
Tūrangi and Taupō who will help special needs
and vulnerable adults to access the programme
• Spa Bike Park to fund ingredients for a barbecue
fundraiser, with proceeds going towards upkeep
of the park.
A focus on rangatahi at our
thermal sites
In Taranaki, we continued to sponsor water safety
lessons at the TSB Pool in Stratford during the
school holidays. About 60 children went through
the programme this year. In a country surrounded
by water, it’s important for children to learn water
safety skills and confidence. Our sponsorship
means children can learn those skills for free.
We also provided sponsorship to Pareti Pareta –
a regional programme that focuses on the mental
health and wellbeing of rangatahi, delivered
through Taranaki schools, iwi and hapū.
And we continued to sponsor prizes for the
region’s primary and secondary school science and
technology fairs to encourage student innovation,
and the Education award at the annual Taranaki
Regional Council Environmental Awards.
Our Stratford community sponsorship fund also
supported:
• The Kids Foundation to buy a plasma pump
for a child
• TET Athletics Taranaki, to help run the 2021/22
Nexans Fun Run and Walk series
• Ako Wai Programme, to enable five primary
school children each term to attend swimming
lessons
• Toko School, to provide play equipment and
reading resources
• Stratford Golf Club, to buy four sets of junior
golf clubs for training
• NZME, to assist with the Special Children’s
Extravaganza.
In Hawke’s Bay, Our Whirinaki site sponsorship
fund supported Westshore School’s EPro8
programme – an interschool engineering and
science competition that gives children aged 9–13
the chance to learn about and use engineering
skills and equipment. The Westshore School team
qualified for the regional competition this year.
Through supporting the Wingspan Bird of Prey Centre,
we helped to rehome two kārearea (NZ falcon) chicks.
The Whirinaki site also supported Bay View
Volunteer Fire Brigade to participate in the
Firefighter Sky City Challenge. Bay View is
Whirinaki Power Station’s closest fire brigade.
Caring for our native birds
We signed a three-year sponsorship with the
Taranaki Kiwi Trust, which will provide $35,000 a
year to support the Trust’s education, training and
advocacy programme.
We started our partnership with the trust last
year, supporting the development of its education
programme, and the new three-year sponsorship
builds on that.
The partnership aligns with our continuing
sponsorship of the Kiwi Contact education
programme in Wairākei.
Without help, the kiwi is likely to be extinct in the wild
within two generations. Community involvement
and engagement is essential to its survival.
We are also helping another of our native birds,
the kārearea (NZ falcon).
This year we supported the rehoming of two
kārearea chicks, from the Wingspan Bird of
Prey Centre in Rotorua to the foot of Mt Tauhara,
as part of a new three-year sponsorship.
The month-old baby birds were released after being
raised from a pair of rescued falcons at the Wingspan
centre. We hope our sponsorship will support the
release of up to another 12 kārearea into the wild.
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Contact INTEGRATED REPORT 2022Strategic enablers
Greening Kids Taupō empowers students to get involved
with local biodiversity projects.
The Department of Conservation estimates there
are just 5,000 to 8,000 kārerea left – making them
rarer than kiwi, with the current kiwi population
around 68,000.
Kids Greening Taupō
We continue to support Kids Greening Taupō,
which empowers students to get involved in
projects that increase biodiversity and solve
environmental problems.
We funded the salary of an education coordinator
and donated $5,000 to the programme’s 'Take
Action Fund’, which offers grants for restoration
and conservation projects in schools and early
education centres.
We also contributed a $1,000 prize for the winning
school at Greening Taupō Day in June, where
4,500 trees were planted to ‘paint the town green’.
The prize will support a restoration project at the
winning school.
Our support for Kids Greening Taupō aligns with
our support for Greening Taupō planting events
throughout the year. We donated 2,500 trees for
the annual Greening Taupō and Contact Energy
Planting Day in June, and donated another 1,500
native trees for the Greening Taupō and Taupō Golf
Club’s ‘Project Birdlife’ planting day.
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Using water resources sustainably
Water is a precious resource that we share with all
New Zealanders. We rely significantly on access
to water to run our power stations and generate
electricity. Water holds both a practical and
cultural significance in Aotearoa New Zealand. Our
stakeholders want to know that we are using our
water resources in a sustainable way, ensuring that
fresh water is protected for future generations.
At our hydro facilities, water is passed through
our dams to generate electricity, which impacts
river flow, freshwater species migration upstream
and downstream, and the natural transport of
sediment. At geothermal sites, we use the energy
in geothermal fluid to generate electricity. It is
also used by other downstream users, such as
the Wairakei Terraces and Huka Prawn Park.
Cooling water is used at many of our power stations
to keep things running efficiently. This is reused in
cooling towers or returned to the stream, river or
reservoir it was taken from, while some evaporates.
We also use potable water in our offices.
We have a Commitment to Water, which outlines
our approach to sustainable and shared use
of this resource. We maintain registers for the
environmental ‘aspects’ (elements of our actions,
products or services that can interact with the
environment) and environmental impacts at our
Non-consumptive water usage in megalitres (ML)
Source/water use
2022
2021
2020
Clutha Mata-Au River water**
15,730,988
15,098,980
16,624,902
Geothermal reservoir
Geothermal cooling water**
Total
75,339
332,270
69,180
336,840
75,992
330,047
16,138,597
15,505,000*
17,030,941
* Total re-stated due to reporting error, where last year the geothermal reservoir was not included in the total.
** Fresh water
Total water usage in megalitres (ML)
Source/water use
Withdrawal
Discharge Withdrawal
Discharge Withdrawal
Discharge
Geothermal reservoir
105,577
15,228
103,177
15,831*
114,805
23,818*
2022
2021
2020
River and surface water**
Water from third parties**
Council**
2,076
294
23
2,509
321
40*
1,536
283
34
Discharge from all sources
15,533
18,727
Total
107,970
30,761
106,047
34,558
116,658
15,476
39,294
* 2021 and 2020 geothermal reservoir discharge re-stated due to double counting. 2021 total discharge reduced by 18,166 ML, 2020 total
discharge reduced by 14,995 ML. 2021 Council withdrawal re-stated due to reporting error. Correction reduced 2021 withdrawal by 7,554 ML.
** Fresh water.
Our areas of operation across Aotearoa New Zealand, according to the World Wildlife Fund (WWF) Water Risk Filter, are considered as 'very low risk'.
WWF Water Risk Filter is a screening tool used by corporate and portfolio level companies, and investors, to help identify, prioritise, understand
and take action in water stressed areas.
Contact INTEGRATED REPORT 2022Strategic enablers
operational sites as part of our Telarc ISO 14001
Environmental Management Certification. These
help us to identify water projects for improvement
each year.
This year at our Te Rapa power station, we were
able to capture water that we use to cool our
boiler water and steam samples, and reuse it in our
cooling tower instead of it going to wastewater.
This initiative reduced our freshwater use and our
discharge impacts.
Our GeoFuture project at the Wairākei geothermal
steamfield will also deliver significant benefits for
waterways, as we move our operations away from
the river and cease discharges of geothermal and
cooling water into the Waikato River and streams
by 2026.
We measure our performance on a range of water-
related impacts from ecological integrity to water
security and water quality.
This financial year we used 16,138,597 megalitres
of water, 99 percent of which was returned to rivers
or to geothermal reservoirs (non-consumptive),
with the remainder discharged in line with our
resource consents.
We had no water-related incidents in the financial
year, although we continue to address the impacts
of the Karapiti incident in 2019, when a large
amount of sediment was discharged indirectly
into the Waikato River.
Protecting biodiversity
Biodiversity simply means the variety of all life on
Earth. It is important to us because our operations
have impacts on species and habitats, which differ
depending on the type of generation, the region
we are operating in, and the local environment.
Our biodiversity commitment sets out our intent
and responsibility to protect the indigenous
species and unique ecosystems we impact.
Our goal is to have thriving and sustainable
ecosystems within all habitats that we influence.
We do this by ensuring that all of our sites have
site-specific biodiversity management plans
and we engage with tangata whenua and local
communities, work with external partners and
experts in biodiversity management, and support
hapū and community groups to achieve their
biodiversity goals.
The diversity of our operations results in a range
of different impacts. At our geothermal operations
in the Taupō region, we are careful to manage
the impacts we can have on native vegetation
that relies on warm ground or water, and are
mindful that takes or discharges of freshwater
can negatively affect water quality. At our hydro
operations on the Clutha River, our greatest
impacts are on the passage of fish past our dams
and on water flow rates. At our thermal stations,
our impacts on biodiversity are minimal, however,
we have pest control and planting programmes to
enhance ecosystems near our power stations and
we work with others in the community to achieve
biodiversity goals.
Our approach to biodiversity management is to
first look for opportunities under our control and
influence, then to support community groups
doing work in these areas.
We have established plans to mitigate our
biodiversity impacts for all our operational sites
and we report on our progress to the Board’s
Safety and Sustainability Committee.
As part of our biodiversity plans, we have
committed to begin restoring and enhancing
five high-value sites by 2026, including one site of
cultural significance in partnership with tangata
whenua. This year we identified and developed
biodiversity restoration plans for two sites of
significance, including the Otumuheke Stream
and Waikato–Aratiatia River Corridor.
Across our sites, we caught 4,832 pests and planted
55,206 trees this year (well up from 3,354 pests
caught and 29,068 trees planted last year).
Our elver (young eel) trap and transfer programme is one
of the ways we mitigate our impact on native fish species.
We have more information on our habitat
protection and restoration work in our
sustainability disclosures.
Elver trap and transfer
One of the ways that we mitigate our impact on
native fish species around our hydro power stations
is through our trap and transfer programmes.
Our elver (young eel) trap and transfer programme
at Roxburgh dam was incredibly successful this
season, with 198kg of elvers caught – more than
double the previous record of 81kg in 2019.
This provided an excellent opportunity to carefully
release elvers in many sites across the Clutha Mata-
au, including Lake Dunstan, Lake Hāwea, Lake
Wānaka, Lake Roxburgh and Manuherikia River –
a positive step towards restoring the tuna (native
eel) populations in the upper regions of the
catchment.
The average weight of the elvers was 3.06 grams,
so we estimate that 64,705 elvers were successfully
trapped and transferred.
We captured 227 large adult tuna in the headwater
lakes this season and transferred them to below
the Roxburgh dam to allow them to migrate when
ready. This included five confirmed migrant tuna.
Migrant tuna can be identified by their larger size,
and features such as larger eyes or changes in
head shape.
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Contact INTEGRATED REPORT 2022Strategic enablers Torepatutahi Wetlands.
Last year 330 tuna were transferred downstream,
including 19 migrant tuna.
It’s difficult to compare results from previous years
for the tuna transfer programme as conditions
vary considerably each year. We are continuously
working towards a strong understanding of the
health, habits and whereabouts of the tuna in
lakes Wānaka, Hāwea and Whakatipu, so ongoing
monitoring and feedback is key.
Working with our Torepatutahi
Wetland partners
As part of our reconsenting for the Ohaaki Power
Station in 2013, we agreed to work with Ngāti Tahu
– Ngāti Whaoa Runanga Trust, Fish and Game, the
Department of Conservation and local landowners
to restore the flora and fauna in the Torepatutahi
Wetland next to the Waikato awa near Ohaaki.
We committed to enhancing the 30ha wetland
adjacent to the power station for the life of the
consents (35 years), to control pest plants and
animals, exclude agricultural stock, provide a
habitat for indigenous species, and monitor
progress of restoration.
In February 2020 we did aerial spraying to
control willows across a large area of the wetland
due to ground-based methods being unsafe
and impractical. We used a standard spraying
method for controlling willows, which was
recommended in the long-term restoration plan
by external ecological experts, and we obtained
the appropriate approvals when the project started
in 2014. Following the spraying, stakeholders
complained that we had not communicated with
them about the spraying and that it had damaged
indigenous plants.
We took the criticism on board, discussed solutions
with our partners and developed an interim annual
management plan that provides a roadmap for
restoration works over the coming 12 months.
This gives stakeholders a better understanding
of planned works and an opportunity to provide
feedback or make suggestions.
Within the wetland we prepared a site for planting
last winter, selected the species and planted
4,000 native plants in areas where weeds were
under control. In February 2022 our ecologist
completed biannual transect monitoring, to check
regrowth of native species impacted as well as
regrowth of weed species and willow. The report
found positive changes to the wetland flora,
including regrowth of native species and effective
control of target willows. The report also provided
recommendations for the 2022 winter season,
which we’ve discussed and agreed with partners.
We plan to refresh the long-term management
plan in FY23 to include newer management
techniques, consent requirements as a result
of new regulations (National Policy Statement
for Water), and address some requests from
our stakeholders relating to birds, aquatic fauna
and mahinga kai (which includes the social and
educational aspects of food gathering).
We have also refreshed our operational pest animal
control plan and made commitments for the next
two years. We will test new traps on the market
and trial different locations to better understand
where the pests are entering the wetland.
We’re continuing to see an increased presence
of native birds, in particular the at-risk fernbird.
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Contact INTEGRATED REPORT 2022Strategic enablers Transformative
ways of working
Material topics
Team culture
Workforce health and wellbeing
Diversity and inclusion
Infrastructure safety
Our Transformative Ways of Working
(TWoW) programme is about giving our
people flexibility and choice to work
from anywhere, while improving their
work experience and engagement and
making Contact a more effective and
productive place to work.
It’s ensuring we make the rapid changes and
transformation needed to deliver on our Contact26
strategy while also adapting and responding to
Covid-19. We need our people to be ready, willing,
able and excited to get things done, and to support
them through our OneContact culture and
exceptional safety leadership.
At the start of 2020, the pandemic forced us to
‘lift and shift’ our people from corporate offices
to working from home.
Since then, we’ve learned a lot about how our
people like to work and the best ways to create
flexibility and choice. We’re using that knowledge
to design our ideal environments, tools and
practices to support hybrid working. This includes
ensuring we have the best possible technology
for working from anywhere, arming our people-
leaders to support hybrid teams, creating better
work spaces, and prioritising our people’s
wellbeing so they can thrive.
Research shows that companies that embrace
flexible working are likely to attract and retain the
best talent, future proof their culture and create
competitive advantage – and that has been our
experience too.
In November 2020 we started using Peakon, a
people engagement tool that includes quarterly
online surveys. In April, 88 percent of our people
participated in the Peakon survey. Our overall
engagement score was 8.2/10, up from 7.7 at the
same time last year, and our highest score since
the surveys began.
Our people rated us 8.7/10 for ability to work flexibly
(up from 8.5 this time last year) and 9/10 for ability
to work remotely (up from 8.6 last year).
Our employee Net Promoter Score (the number
of people who would recommend working
at Contact versus those who would not) also
increased to +49, up from +29 for the same
period last year and +28 in November 2020.
The main concerns identified through Peakon this
year were workload and stress, so we’re doubling
down on the wellbeing of our people, including
launching the Wellbeing Tick programme and
reviewing our existing mental health and EAP
support.
Creating better work spaces
Through TWoW we’ve learned a lot about how
our people like to work, including what they need
to be able to connect and collaborate effectively
when working in our offices. We’re applying this
knowledge to the design of our workspaces.
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Contact INTEGRATED REPORT 2022Strategic enablers Our Auckland office lease expired in 2020 and
we experimented with sharing a workspace at the
Generator in Wynyard Quarter, before deciding to
move to our own purpose-designed workspace.
The new office, which opened in February 2022,
was designed to bring our ‘It’s good to be home’
brand to life, and create dedicated meeting,
working, connecting and collaborating spaces.
In FY23, we’ll carry out a similar refit in our
Wellington office and our Dunedin contact centre.
We will also develop a work programme to create
the same look and feel across all our workplaces
in Aotearoa New Zealand. We’re exploring options
around establishing a possible geothermal ‘centre
of excellence' in Taupō.
Our focus is on having the right technology and
workspaces to enable our people to connect and
collaborate wherever they choose to work.
Shaping our Contact Community
Shaping our Contact Community (SOCC) is our
leadership framework, introduced in April 2021.
The framework defines what leadership means
at Contact, centering around our five leadership
themes: constructively leading with open and
honest conversations, investing deeply in knowing
ourselves and others, openly and optimistically
exploring all ideas, helpfully standing in the role of
teacher and student, and unanimously connecting
as OneContact.
To embed the SOCC framework and deepen the
leadership journey for our people, this year we
started using the Human Synergistics Life Styles
Inventory tools (LSI 1 Self description and LSI 2
Description by others) and High Performing Teams
Framework.
Our Leadership Team completed the programme
first, and we’re now well into rolling it out across
our tier 3 (senior leaders). All of our senior leaders
and people leaders (around 170 people) will complete
the programme over the next year and beyond.
Contact University launched
To be the leader we aspire to be, we need our
people to be propelled by curiosity and to become
lifelong learners. We embrace learning as part
of our DNA and through our OneContact culture.
Last year our people told us through Peakon
that they wanted more access to training and
development.
In August we launched Contact University –
an online learning portal for people in every part
of our business – to build the capability and skills
we need to deliver on our strategy and to help our
people grow and thrive.
As well as being a one-stop-shop for compliance
training modules (such as health and safety and
privacy) Contact University offers hundreds of
courses, virtual classrooms, videos and more, that
people can self-select depending on their role,
learning needs and interests. It has 11 learning
academies for specific disciplines (such as a Retail
Academy and Generation & Trading Academy),
and structured pathways for key skills within the
SOCC leadership framework.
Content is created in-house by skilled subject
matter experts as well as externally, in partnership
with our learning experience provider Open
Sesame, and is updated each quarter. Our people
can also contribute educational content that
they’ve found interesting or helpful.
Since Contact University launched, course
completions are up more than 500 percent year-
on-year and our people have completed more than
12,000 courses.
Our Peakon score for personal growth increased
from 7.2/10 to 7.9 – for factors including professional
growth, career pathways, opportunities to learn new
skills and a supportive manager or mentor.
Changing labour market
This year we continue to see the long-term impacts
of Covid-19 play out in the labour market. The
market continues to be tight for specialist talent
and skills, such as geothermal, digital and ICT
expertise.
Gaining our accreditation under the AEWV
(Accredited Employer Work Visa) has ensured
that we will again be able to tap the international
talent marketplace for hard to find skills. We
are in a unique position as under the Green List
occupations schedule, a large proportion of skills
and capabilities fall into these categories. This will
allow us to move with more agility when looking
at international options.
Conversely the opening of borders and 'the great
resignation' has the potential to put pressure
on our local labour market. To ensure we have
a robust pipeline we recognise the importance
in developing our people and building a strong
back bench of future leaders from within.
This year we launched our Talent Framework,
building a robust process in identifying top
talent within Contact and developing that pipeline
into future leaders. We have also prioritised
strategic capability and workforce planning to
support our areas of growth and ensure we have
a robust pipeline to execute on our strategy.
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Contact INTEGRATED REPORT 2022Strategic enablers Undisclosed
1.4%
Women
45.6%
Gender FY22
(Contact,
Simply Energy and
Western Energy)
Men
53.0%
Undisclosed
1.2%
Age diversity FY22
(Contact,
Simply Energy and
Western Energy)
Under 30
20.1%
Over 50
28.8%
30–50
49.9%
Ethnicity1 FY22
450
400
350
300
250
200
150
100
50
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1 Individuals can choose to identify multiple
ethnicities. Data is for Contact only, Western
Energy and Simply Energy do not track ethnicity data.
2 African, Middle Eastern & Latin American.
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Embedding diversity and inclusion
Our Inclusion and Diversity Policy and related
strategy is underpinned by our vision to build a
better Aotearoa New Zealand – by reflecting the
diversity of our customers and communities,
and creating a culture where inclusion is deeply
embedded as part of our Tikanga and our people
are able to truly be themselves.
We continue to partner with Global Women on the
Champions for Change reporting initiative, which
monitors the collective and individual progress of
participating organisations towards our shared
goal of between 40–60 percent women in our
organisations, at all levels.
The Champions for Change initiative published its
fourth Diversity and Inclusion Impact report in late
2021 (data reporting period 1 April 2020 – 31 March
2021). The data from participating organisations
shows female representation has increased in
certain workforce categories from board to senior
managers between 2018 and 2021. Our Contact
insights within the Champions for Change
Diversity and Inclusion Impact report 2021 show
that we achieved gender balance (a minimum
of 40:60 women to men) across over half of
our workforce categories, but there are several
categories where we need to improve. We have
57 percent of women on our Board, 43 percent
of women in senior management roles and
46 percent of women in our overall workforce.
This year we also took part in the Mind the Gap
initiative, which seeks to standardise pay equity
reporting across Aotearoa New Zealand. Mind the
Gap reports on the overall pay gap between men
and women in terms of median pay, and our pay
gap using this measure (at 30 June 2021) was
49 percent. This reflects the challenge we have with
the composition of our workforce at Contact, and
across the electricity sector. We have many more
women than men in our customer contact teams.
And it’s the other way around at power station sites,
which have many highly skilled and highly paid roles.
We are committed to doing more in this area and
taking on the challenge to reduce the gap.
We continue to support and empower WING –
Women in Geothermal. WING is a not-for-profit
international organisation promoting professional
development, education, and equality in the
geothermal industry. Last year, WING NZ and our
members at Wairākei launched a successful high
school internship that enabled seven students to do
hands-on work and get an inside look at geothermal.
This year, WING NZ is focused on promoting
professional development opportunities, advocating
for equitable workplace policies, and supporting our
industry’s mission towards a sustainable future.
We retained our Rainbow Tick accreditation this
year. We have continued to embed the programme
– supporting our Pride at Contact networking group
to set up for success, building the group’s profile
through our inductions and internal communications,
and developing plans for education and training
for allies. We are preparing for reassessment in
late 2022, which will show us how we’re doing
and help us to keep building an inclusive culture.
Over summer we employed 16 interns across our
ICT, Generation and Trading and Development
teams – giving university students the chance to
gain professional experience and to apply their
knowledge in the workplace.
Some of the interns were part of our Māori
Summer Internship Programme, which helps
to strengthen our bonds with tangata whenua,
and develop their whānau, hapū, and iwi. For the
2021–2022 summer programme we had five interns
work with us during their summer break – three
from Ngāi Tahu and two from Ngāti Tūwharetoa.
In February 2022 we employed four graduate
engineers across our Wairākei, Taranaki and Clyde
sites. The graduates will take part in an 18-month
programme, working in different teams across
the business to gain broad experience. At the
end of the programme they will each be offered a
permanent role in one of the teams. The graduate
Contact INTEGRATED REPORT 2022Strategic enablers programme is about giving graduates a broad
foundation where they are trained, supported
and mentored, to accelerate their development.
We are also helping to bring more tangata whenua
into our contractor workforce, and support them
with training and pastoral care, through our
Ka Hiko programme.
There are detailed diversity tables in the
sustainability disclosures.
Delivering through the pandemic
We kept our call centres open and our power
stations operating at full capacity throughout
another year of the Covid-19 pandemic, thanks
to an enormous effort by all our people.
The pandemic response at Contact has been led
by the Covid Response Group (setting the strategy)
and the Covid Working Group (the day-to-day
response), ensuring we have the right policies
and processes in place, and adapting business
continuity plans as needed.
About 50 percent of our people have tested
positive for Covid-19, which has put a lot of pressure
on our people, especially in our control rooms and
call centres, and we acknowledge their effort and
flexibility. Our flexible ways of working have meant
household contacts are often able to continue
working if it works for them and they’re able
to do so safely, while caring for family at home.
In January we implemented a vaccination policy
requiring anyone entering our sites to be double
vaccinated, and the policy remained in place until
end July 2022. We continue to review our Covid
vaccination and testing policies regularly.
We took part in a government trial of Rapid
Antigen Tests (RATs) in late 2021, and we continue
to use RATs as an important defence against
Covid-19 entering our sites. Everyone on our
generation sites continues to test daily, and
so far our people have completed more than
50,000 RATs.
We developed a mobile app for our people to let
us know if they or others in their household have
a positive RAT. The app was originally developed
by Meridian, which offered the code to other
businesses in return for a donation to the KidsCan
charity, an example of the great collaboration seen
across industry during the Covid-19 response.
We also introduced SaferMe, a bluetooth enabled
badge worn by staff, visitors and contractors at
our call centre and generation sites. When we’re
notified of a positive case, we can immediately
identify close and casual contacts based on their
proximity and length of exposure. We can then
quickly determine who needs to isolate as a close
contact and who can safely keep working. SaferMe
is being used actively to identify close contacts of
people who have tested positive and who have
been on Contact sites in the days before their
positive test. The system helps prevent ongoing
transmission and infection of our workforce and
ultimately their families and the wider community.
Throughout the pandemic, we have continued
to offer guidance and support to our people,
including an intranet page with easily accessible
resources.
We have also offered our people special Covid-19
leave, meaning they don’t need to worry about
staying home and getting well before returning
to work, to do the right thing for their whānau
and Aotearoa New Zealand.
Supporting people to thrive
With the ongoing complexities of the global
pandemic, we have continued to focus on supporting
our people and keeping them safe. Our people have
been adaptable through constantly changing ways of
working during the pandemic, but we also know that
working differently has its own challenges, including
human connection. Our people are asking for more
consideration of their wellbeing, so we are making
this a priority.
We have always focused on a culture where safety
is deeply embedded, and now we are working to
embed wellbeing in the same way.
In February, we became the first company to sign
up to the new workplace wellbeing accreditation
programme, Wellbeing Tick.
The Wellbeing Tick draws on international research
and best practice to set the standard for workplace
wellbeing in Aotearoa New Zealand. It takes a holistic
approach, including factors such as mental health,
physical health, emotional and spiritual health, sleep,
relationships, and financial health – everything that
people need to thrive.
We launched the programme with a discovery
phase, including a survey and focus groups to hear
about the challenges our people are facing, the
support they need, what Contact currently does
well, and where we could do better.
We are using those insights to develop the Contact
wellbeing strategy, and a plan of action towards
our Wellbeing Tick accreditation.
The programme will include reviewing the
wellbeing programmes we already have in place,
looking at how our policies and processes support
or compromise wellbeing, and factors such as
leadership capability, accessible and holistic
support, awareness and education.
The Wellbeing Tick will transform our wellbeing
culture for the long term. Our progress will be
assessed for ‘accredited' status in March 2023,
and we will continue to use the framework to
build our wellbeing culture year on year.
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Contact INTEGRATED REPORT 2022Strategic enablers We are looking to shift to metrics that help us to
better understand how work is done, with a focus
on identifying and enhancing the capacities that
make things go well. Measuring our capacity to
work safely, rather than measuring and focusing
on an absence of safety, will allow us to boost
capability and resilience, setting up our people
and teams for greater success.
Our TRIFR for controlled activity (work done under
our health and safety management system, e.g.
at our sites or by our people) was 1.7. This included
five recordable injuries. There was one minor injury,
and four moderate injuries. Our TRIFR measure is
calculated based on hours worked (2.9m in FY22)
and number of injuries.
Our TRIFR for monitored activity (work done by our
service delivery partners under their own health
and safety systems) was 10.9, representing three
minor injuries.
TISR assesses all health and safety and process safety
events and considers both actual and potential
consequences, so that we get a view of how well
our defences are working for our critical risks.
TISR was 2,180 within controlled activity in FY22.
Free skin checks
This year we offered free skin checks for site
employees, which resulted in a significant number
of our people going for further checks and
treatment.
As an example, at the Wairākei site, 88 people
attended the on-site skin check clinic, 22 were
referred for further checks and two were diagnosed
with melanomas. One person has told their story to
encourage others to get checked, after having their
melanoma removed with a good outcome.
We plan to make free skin checks available for all
our people in FY23.
Technology for the future
We’ve begun a major upgrade of our core IT
platform, SAP, to better support our business,
our people and our customers for the future.
SAP (Systems Applications and Products) is a
centralised system that enables everyone in Contact
to access and share common data. It enables key
IT processes in every part of the business.
At 10 years old, our SAP platform needs upgrading
to a new version, to keep it operating effectively and
to give our people the best possible user experience.
The new version is much faster, will have a better
user interface, will include new tools to optimise the
way people work, and can run on a mobile device.
The upgrade is planned to be completed in 2023
and will deliver significant benefits to people
across the business.
In finance for example, a monthly vendor payment
run that currently takes several hours across
multiple screens, can be done with one click, on
one screen, within minutes. As well as increasing
efficiency, it will reduce the risk of human error.
In generation we can use it to improve our plant
maintenance management processes with an
expected time-saving of 10 to 20 percent.
Ultimately the upgrade will lead to better
experiences for all of our customers too.
Improving our safety culture
Continuous improvement is a key part of our
journey towards a truly generative safety culture.
This year we’ve been working on a new safety
leadership programme for our people . We’re
exploring options with possible providers and will
roll out the programme in FY23. The programme
will build capacity in our people to adapt safely to
changing work conditions.
We also have a project underway investigating
how health and safety information is managed and
accessed at Contact. Our aim is to make it easier
for our people to have access to what they need,
when they need it.
Measuring our health and safety
performance
We track our health and safety performance with
two key measures – our Total Recordable Injury
Frequency Rate (TRIFR) and Total Incident Severity
Rate (TISR).
TRIFR is a global measure that can be
benchmarked. However, it is a non-predictive
lagging indicator that looks back at total injury
rates rather than taking the potential risk into
account. The causal pathways for major injuries
are different to those for minor incidents, such as a
rolled ankle. This means that although managing
and preventing minor injuries is important, they’re
not good predictors of more serious injuries. We
will continue to gather TRIFR data as it is required
for some external reporting, but we will not use
it internally.
TISR is a measure that gives us a much better
idea of exposure to risk by assessing the potential
severity of Health and Safety and process safety
incidents.
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Contact INTEGRATED REPORT 2022Strategic enablers Process safety
Tier 1
Tier 2
Tier 3
FY22 FY21 FY20 FY19
0
0
0
3
0
2
0
2
40
49
24
58
Tier 1 – a significant loss of containment of hazardous material
or energy.
Tier 2 – a lesser loss of primary containment or a significant
degradation of barriers.
Tier 3 – learning event where issues have been identified in our
process safety barriers or controls.
Note: This table represents the number of process safety incidents
across our operations. The figures exclude any incidents occurring
in the Ahuroa Gas Storage or Rockgas LPG facilities.
Process safety incidents
As well as measuring injury frequency and incident
severity rates, we measure process safety. Process
safety is a disciplined framework for managing the
integrity of our operating systems and processes.
It relies on good design principles, engineering,
and operating and maintenance practices.
We were the first energy company in Aotearoa
New Zealand to begin measuring process safety
in FY13.
Since we began reporting, we’ve had no Tier 1
process safety incidents (significant loss of
containment of hazardous material or energy)
within Contact's current portfolio of assets,
although there were four in our LPG business
before its divestment in 2018.
This year we had no Tier 2 incidents (a lesser loss of
primary containment or a significant degradation
of barriers), and 40 Tier 3 process safety incidents
(learning events where issues have been identified
in process safety barriers or controls and corrective
actions put in place).
This was a decrease on three Tier 2 incidents and
49 Tier 3 incidents in FY21.
All of the process safety incidents this year were
at the lowest level, with the majority (54 percent)
relating to automatic plant protection operating
as intended (recorded as incidents as part of our
monitoring).
Every process safety incident is reviewed to identify
lessons to be learnt.
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FY22 SUMMARY
WHO WE ARE
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Contact INTEGRATED REPORT 2022Strategic enablers Operational
excellence
Material topic
Privacy and cybersecurity
Our focus on Operational Excellence
enables us to make our operations
much more efficient and to drive best
practice. We have a strong track record
of being good operators and taking
costs out of the business where it
makes sense.
Operational Excellence is underpinned by our
culture, which is safe, innovative and brave. That
includes keeping our people safe; keeping our
plant safe to run; and fostering an environment
where it’s safe to challenge, innovate and fail, and
to learn and evolve.
We continue to innovate to become more efficient,
including using digitalisation and analytics
to transform operations across our trading,
generation, and customer businesses. And we stay
on the front foot to monitor and respond to our
changing regulatory environment, and to engage
with policy development impacting our sector.
Financial performance
In FY22 we have delivered a robust financial result
and solid returns for our shareholders, underpinned
by higher renewable generation volumes and access
to flexible fuel for our back-up thermal stations.
We have navigated the challenges of Covid-19 and
supply chain disruptions, progressed the build
of our Tauhara power station development, and
continued to move forward on our Contact26
strategy which ensures we are well-positioned to
keep delivering strong results into the future. Our
healthy financial position supports our aspiration to
lead the decarbonisation of Aotearoa New Zealand.
Our profit for FY22 was $182 million, down
$5 million from a year ago on lower operating
earnings (EBITDAF1) and higher depreciation,
partially offset by lower interest costs reflecting
the capitalisation of interest to major growth
capital projects, lower tax on earnings and
favourable movements to the fair value of
financial instruments against the prior year.
Dividends (cps) – declared
FY18
13
19
32
FY19
FY20
FY21
FY22
16
16
14
14
23
23
21
21
39
39
35
35
Interim dividend
Final dividend
1 EBITDAF is a non-GAAP (generally accepted accounting practice) measure. Information regarding the usefulness, calculation and
reconciliation of this measure is provided within note A2 to the financial statements.
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Contact INTEGRATED REPORT 2022Strategic enablers EBITDAF decreased by $16m to $537m, down
3 percent on the prior year on lower wholesale
electricity prices and the rising gas and carbon
unit costs, which were partially offset by more
renewable generation.
Operating free cash flow1 for the period decreased
from $371m to $325m, down 17 percent year-on-year
primarily on lower operating earnings, additional
working capital investments in carbon, higher
stay-in-business capex and higher cash tax paid
on strong FY21 earnings.
An interim ordinary dividend of 14 cents per share
was paid in March 2022, and in August 2022 the
Board approved a final ordinary dividend of
21 cents per share (imputed by up to 19 cents
per share for qualifying shareholders). This will
be paid to investors on 27 September 2022.
This means we are delivering investors a 35 cents
per share annual dividend, equal to FY21.2
The dividend policy targets a pay-out ratio of
between 80 percent and 100 percent of the
average operating free cash flow of the preceding
four financial years.
We are focused on leveraging opportunities to
continue to transform our ways of working that flow
through to increased efficiencies and improved
profitability. We have a robust balance sheet,
a world class portfolio of assets and an excellent
strategy to deliver on stakeholder expectations.
The last five years in review
For the year ended 30 June
Unit
Revenue
Expenses
EBITDAF
Profit/(loss)
Profit per share – basic
Operating free cash flow
Operating free cash flow per share
Dividends declared
Dividends paid
Total assets
Total liabilities
Total equity
Gearing ratio
$m
$m
$m
$m
cps
$m
cps
cps
$m
$m
$m
$m
%
20182
2,275
1,794
481
132
18.4
301
42.0
32
201
5,311
2,584
2,727
35
20192
2,519
2,001
518
345
48.2
341
47.5
39
251
4,954
2,172
2,782
28
2020
2,073
1,627
446
125
17.5
290
40.4
39
280
4,896
2,275
2,621
31
2021
2022
2,573
2,020
2,387
1,850
553
187
25.3
371
50.2
35
274
5,028
2,101
2,927
23
537
182
23.4
325
41.8
35
272
5,166
2,326
2,840
28
Investing in digital capability
and transformation
We’re investing in digitising our business to drive
operational excellence and deliver best-in-class
experiences for customers and our people.
Over the past few years, we’ve focused on
building digital capability in retail – delivering
great results for our customers and our people.
More than 70 percent of our customer interactions
are now through digital channels, including our
website and online self-service, the Contact Energy
app, automated IVR (Interactive Voice Response),
Facebook Messenger and WhatsApp. Customers can
get the support and information they need faster,
and it frees up our customer service representatives
to help other customers who need it. We have the
lowest cost-to-serve in the Aotearoa New Zealand
energy sector among our Tier 1 competitors and
are delivering excellent customer experiences.
At the NZ Compare awards in February, our app
was named Best Mobile Application – alongside
our awards for Best Customer Support, Power
Provider of the Year, and the Supreme Champion
Award. The awards, which recognise the best of
the best in the broadband and energy sector, show
how far we’ve come through our people-centric
approach to customer experience and the role of
digital in that.
This year we also turned our focus to building
digital capability in our generation and trading
business, with the goal to be the leading digital
energy company in Aotearoa New Zealand by 2026.
The increased digital capability and transformation
will be accelerated through increased investment
and improvements to our core generation
technology platforms (like the SAP upgrade
and our data platforms) to create reusable and
scalable solutions.
1 Operating free cash flow is a non-GAAP (generally accepted accounting practice) measure. Information regarding the usefulness, calculation and reconciliation of this measure is provided within note A2
to the financial statements.
2 Figures reflect the combined result and position for continuing and discontinued operations.
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Contact INTEGRATED REPORT 2022Strategic enablers Our regulatory environment
Aotearoa New Zealand’s regulatory environment
provides the framework within which our business
operates.
We actively monitor legislative and policy changes
to ensure we meet our obligations and manage
risks and opportunities. We also work hard to
maintain broad relationships across the political
divide, pull our weight with industry and business
organisations, and ensure our voice is heard by
regulators on behalf of our customers and investors.
Our approach is straightforward, open-minded and
evidence-based, in line with our Tikanga. We aim
to build sustained and trusted relationships with
external stakeholders who shape and influence
the environment in which we operate.
Traction on climate change
It was an historic year in the Government’s response to
climate change. We saw the release of the first three
emissions budgets, the first Emissions Reduction
Plan, and the draft National Adaptation Plan. These
documents form the basis of the Government’s
contribution to global efforts to limit temperature
rise to 1.5˚C above pre-industrial levels and adapt
to the changes this will have on our environment.
The documents show the critical role renewable
electricity will play in reaching Aotearoa
New Zealand’s emissions targets, including an
accelerated move to electric vehicles and public
transport, as well as electrification of heating,
process heat and industry.
We welcome the Government’s new target
of having 50 percent of total final energy
consumption coming from renewable sources by
2035. Our science-based decarbonisation targets
will make a material contribution to this target, as
will our strategic goal to grow demand backed by
new renewable developments.
We also welcome the Government’s commitment
to developing an Energy Strategy for Aotearoa
New Zealand. The strategy will consider strategic
challenges in the energy sector and signal
pathways away from fossil fuels. It will consider the
challenges in delivering stable, affordable, and highly
renewable electricity, as well as wider energy goals
such as transitioning away from natural gas and
decarbonising industry. We will engage with officials
throughout the development of the strategy.
Finding a solution to the ‘dry year problem’
The Government is looking at options to address
Aotearoa New Zealand’s ‘dry year problem’ – that
existing hydro-power catchments sometimes don’t
receive enough rainfall or snowmelt and storage
lake levels run low.
As we transition away from fossil fuels and
increasingly rely on hydro, wind and solar, the dry
year problem may expand to become a dry, calm
and cloudy problem.
The Government is investigating solutions through
a project called the New Zealand Battery Project.
‘Battery' refers to the way in which the solution
may provide stored energy for the country’s
electricity system.
We are engaging closely with the government
and officials on potential solutions to address this
challenge.
We consider that a number of commercial options
exist to address this challenge, including demand
flexibility, green hydrogen, smaller battery projects
such as Contact's proposed Stratford battery, and
other commercially viable options that the private
sector can deliver.
Resource management reforms
The Government is undertaking fundamental
reform of Aotearoa New Zealand’s Resource
Management Act, aiming to improve
environmental and development outcomes.
Key provisions of the proposed Natural and Built
Environments Act (NBEA), which will be the
primary replacement for the RMA, were released
late June 2021.
Our Chief Executive Mike Fuge joined other sector
CEOs in a combined letter responding to the
We’re using digitalisation to optimise our existing
generation assets, including asset performance
and maintenance, and health and safety. And we’ll
be using that capability to shape how we plan and
design future generation assets, ensuring we build
digital-first, with digital needs and opportunities
front-of-mind.
Our focus in generation includes applying
advanced analytics across our assets and trading
activity, introducing agile and cross-functional
ways of working, and providing an omnichannel
experience for our people, so they can access the
same information and tools for the job wherever
they’re working – whether they’re in an office or
out on a steam field.
Over the next year we’ll pilot a ‘digital twin’
capability in generation – virtual versions of physical
generation assets – playing a coordinating role
for performance measurement and maintenance
planning, and increasing our ability to run
scenarios and simulations. This will be a significant
advance for safety and efficiency, and will help
integrate our operations between our major
projects teams who build our assets, and the
development teams who scope and contract them,
supporting activities such as bidding, supplier
coordination, and plant construction.
We’ll also be optimising our trading activity, using
smarter technology, advanced predictive modeling
and insights, and more closely aligning our plant
performance and operations with our trading
operations.
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Contact INTEGRATED REPORT 2022Strategic enablers to acceptable levels. This year we focused on
new tools and services to enable us to detect,
prevent, or respond to suspected security incidents
more quickly; we ensured that the devices our
remote workforce use to access Contact data and
applications are properly managed and secured;
and we expanded the requirement for multifactor
authentication to reduce the risk of unauthorised
remote access. We’re also reducing our ‘attack
surface’ by ensuring our people have only the
access privileges they need, and revoking access
privileges or accounts when they’re no longer
needed.
proposed reforms, emphasising the important
role of renewable electricity generation in
decarbonising the economy, and that the NBEA
needs to provide efficient and effective pathways
for renewable projects.
The new legislation is expected to be enacted in
the second half of 2022.
Transmission pricing methodology
After 13 years of deliberation, Aotearoa New Zealand’s
electricity regulator, the Electricity Authority,
has decided to adopt a new transmission pricing
methodology (TPM), which will take effect in 2023.
The TPM determines how the national transmission
grid owner, Transpower, recovers the costs of
running the grid from its transmission customers.
The grid transports electricity across 12,000km of
transmission lines from where the electricity is
generated to industrial customers, and through
distributors’ networks to our homes and workplaces.
We broadly support the principles of the TPM.
It provides certainty for Contact and our large
industrial customers about the future costs of
connecting to the network, which gives us greater
confidence as we invest and grow.
Wholesale market competition review
The Electricity Authority is reviewing competition
in Aotearoa New Zealand’s wholesale electricity
market. In a paper released in December 2021 the
Authority found that prices have largely reflected
underlying supply and demand conditions.
However, it raised concerns about some price
increases, which could not be easily explained by
the Authority’s modelling.
In particular, the Authority expressed concern
with the price reached by Rio Tinto to supply
Tiwai Point aluminium smelter in January 2021.
The Authority is investigating if this price adversely
impacted the efficient operation of the wholesale
electricity market.
identified a number of factors contributing to the
unexplained prices, such as uncertainty in the gas
market and transmission constraints.
The Authority is expected to make final decisions
by the end of 2022.
Protecting privacy
Privacy is important and becoming more so as the
world relies increasingly on digital communications.
Guided by our Tikanga, we take responsibility
for looking after and respecting all personal
information that we manage. We expect our people
to comply with the Privacy Principles set out in the
Privacy Act 2020 and we have two Privacy Officers
to help drive and manage our privacy practices.
We audited Contact’s updated privacy policies
and procedures after the Privacy Act 2020 was
introduced, and over the past year we’ve been
implementing recommendations from the audit.
This included further developing and enhancing
our privacy policies and procedures, and
developing a privacy training module for our call
centre staff.
Over the next year we will continue to review and
refine our privacy frameworks and consider further
training.
We are reporting on privacy complaints and
breaches in our Sustainability disclosures.
Securing sensitive information
We have processes in place to ensure our sensitive
information is well protected from cyber security
threats.
Our Information Security team is continuously
monitoring Contact ICT systems for suspicious
behaviours, responding to potential issues, and
assessing projects for new security risks they
could introduce.
Contact is engaging closely with the Authority in
these investigations. In our submissions we have
We also have an annual work programme to
identify Contact’s highest risks and reduce them
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Contact INTEGRATED REPORT 2022Strategic enablers Governance
matters
Contact
Contact
INTEGRATED
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Governance matters
Good corporate governance protects the interests of all stakeholders and
enhances short-term and long-term value.
We regularly review our corporate governance
systems and always look for opportunities to improve.
At 30 June, we comply with the recommendations of
the NZX Corporate Governance Code in all material
respects. You can see our full reporting in our
Corporate Governance Statement on our website.
Board composition
Contact’s Board consists of seven directors, with
a wide variety of skills, experience and points of
view. Our Board shows appointment dates and
commitee memberships. A short biography
setting out the skills and experience of each director
is available on our website.
Our Board
The Board’s role and responsibilities
The Board is responsible for Contact’s governance,
direction, management and performance.
Specific responsibilities include:
• Setting and approving Contact’s strategic
direction
• Approving major investments
• Monitoring financial performance
• Appointing the CEO and monitoring CEO
and senior management performance
The Board considers all of the current directors,
including the Chair, to be independent in that
they are not executives of the company and do
not have a direct or indirect interest, position,
association or relationship that could reasonably
influence in a material way, their decisions in
relation to Contact. In making this assessment,
the Board has considered the factors in the NZX
Corporate Governance Code that may affect
director independence.
In August 2021, Audit and Risk Committee Chair
Dame Therese Walsh left the Board to focus on
other governance roles and was replaced by
experienced director, Sandra Dodds.
Sandra brings international infrastructure
experience and strong financial skills to
complement the expertise of the other directors.
• Ensuing appropriate systems to manage risk
• Reviewing and approving compliance systems
• Overseeing our commitment to our Tikanga,
sustainable development, the community
and environment, and the health and safety
of our people.
To assist with succession planning and ensure the
appropriate skills and experience are represented
on the Board, the Board has developed a director
skills matrix. The matrix shows the areas in which
the Board considers director capability is required
to enable Contact’s success, and the expertise held
by current directors.
In 2021, the Board commissioned Korn Ferry to
undertake a full review and refresh of the director
skills matrix. This financial year, the matrix has been
further updated to reflect the directors’ assessment
of the current skills held by the Board.
It’s not expected that every director will be an expert
in every area, but all skills in the matrix should be
represented on the Board as a whole.
The matrix shows a good spread of expertise and
secondary skills among current directors. In addition
to the skills in the matrix, all seven Contact directors
have strong governance expertise.
Board performance
We recognise the value of professional development
and the need for directors to remain current
in industry and corporate governance matters.
Contact assists directors with their professional
development in a number of ways, including an
induction programme for new directors, briefings to
upskill the Board on new developments, deep-dive
workshops on key issues and Board study tours.
A fund is available for director development
opportunities, and the Chair may approve
allocations from the fund for opportunities that
benefit both Contact and an individual director.
We regularly review the performance of the Board
to ensure the Board as a whole, and individual
directors, perform to a high standard. A full
independent Board performance review was carried
out by Propero Consulting in early 2022. The results
were reported in confidence to the Board in April
2022. The Board was pleased with the findings of
the review and has developed an action plan to
implement recommendations arising from it.
Contact INTEGRATED REPORT 2022Governance matters
Director skills matrix
Strategic Focus
Director Expertise
Governance Capabilities
Primary
Secondary
Brand value and
customer experience
Brand identity and value. Deep customer insight and advocacy including in energy poverty. Understands generational
shift and the impact on customer drivers. Retail growth and transformation expertise including customer-centric
experience design, data analytics, digital marketing, sales, and agile retail. Skills to support and challenge progress
towards improving the customer experience and reducing cost to serve.
Energy sector including generation,
renewables, and wholesale energy
markets
Leadership experience across the energy sector including in a generation portfolio of geothermal, hydro and thermal,
energy markets, supply/demand and commercial and industrial customers. Core understanding of key drivers in
value creation and prediction of market needs, moving towards a sustainable renewable energy business model.
Operational risk management including health and safety.
Asset infrastructure
Portfolio efficiency
Capital markets, investment
community and ESG
Government and regulation
Experience successfully leading energy sector or adjacent companies (e.g. physical infrastructure, new technologies,
engineering and construction), large-scale projects, investment and management. Skills to support and challenge
in project investment, build and industrial maintenance.
Expertise in cost base reduction and increasing flexibility of an asset portfolio with sustainability at the forefront.
Proven track record in cost out, improving reliability and resource utilisation while maintaining safety. Ideally
experience in process improvement in resource environments.
Significant investment community experience. This spans finance, communications and securities law to enable the
most effective two-way understanding of, and communication between, the company and the financial community,
contributing to fair valuation and ability to gain buy-in for future strategic shifts. Experienced in sustainable investing and
with the ESG data toolkit for identifying risks, informing solutions and impacting valuations, brand value and reputation.
Ability to engage effectively and collaboratively with key government stakeholders. Brings an understanding of legal,
policy, and regulatory environments that Contact operates in. Insight into non-financial risks around climate change,
natural resources scarcity, pollution/waste and ecological opportunities.
Iwi connection and relationships
Iwi connection and relationships to develop shared understanding of kaitiakitanga and collaborative investment
into resources.
Executive experience
Financial expertise
IT, digital and new technologies
Former CEO or C-suite executive with excellent track record of growing value, leading with purpose, strategy
development and execution, including investing in people, leadership of culture, and effective delegation.
Experience in international markets.
Finance and accounting experience of large companies including transformation and cost optimisation. Expertise
in M&A, project financing and/or wholesale commodity markets. The skills to chair the Audit and Risk Committee.
Contemporary digital ecosystem platforms and systems to support lean operations, automation, security management
and customer innovation. Skills to support and challenge in capital investment plans, technology-enabled operational
efficiencies and service improvements. Strong exposure to trends in new energy technologies, cleantech and new products
that support decarbonisation including the developments in transmission and changing nature of the ‘energy corridor’.
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Contact INTEGRATED REPORT 2022Governance matters Board committees
The Board has four committees to perform work
and provide specialist advice in certain areas.
Our Board works to the principle that committees
should enhance effectiveness in key areas, while
still retaining Board responsibility.
The Audit and Risk Committee helps the Board
fulfil its responsibilities relating to Contact’s
external financial reporting, internal control
environment, business assurance and external
audit functions, and risk management.
The Safety and Sustainability Committee supports
the Board in relation to health, safety and wellbeing
(HSW) objectives and monitoring HSW performance,
and provides governance oversight of ESG matters.
The People Committee advises and supports
the Board in fulfilling its responsibilities across
all aspects of Contact’s people and capability
strategies, risks, policies and practices.
The Development Committee advises and
supports the Board in relation to Contact’s
development pipeline, growth opportunities
and major project delivery.
Contact does not have a Nominations Committee.
Instead, this responsibility is held by the full Board.
This reflects the importance all directors place on
ensuring the Board is performing well and has the
necessary skills.
The current members of the committees are:
Committee
Members
Audit and Risk
Safety and Sustainability
People
Development
Sandra Dodds (Chair)
Victoria Crone
Rukumoana Schaafhausen
Elena Trout (Chair)
David Smol
Rukumoana Schaafhausen
Jon Macdonald (Chair)
Robert McDonald
Sandra Dodds
David Smol (Chair)
Elena Trout
Jon Macdonald
Code of Conduct
and policies
We expect all of our people to act honestly,
with integrity, in Contact’s best interests and
in accordance with the law, all the time. This
expectation, along with our Tikanga, is enshrined
in our Code of Conduct, which underpins our
corporate policy framework. Our corporate policies
address key risks and set expected standards
of behaviour for our people. Information about
how our key policies operate is in our Corporate
Governance Statement and the policies
themselves are on our website.
We have a Protected Disclosure (Whistleblowing)
Policy which offers protections for employees
who disclose serious wrongdoing in accordance
with the process in the policy. Our whistleblower
hotline has been replaced with an online portal
to help ensure we’re aware of any breaches of the
Code of Conduct, our policies or any other illegal
or unethical activity. The portal is easily accessible
and user friendly – anyone at Contact who is
concerned about any incident or behaviour can
use the whistleblower portal to report that matter,
anonymously if they choose. Any whistleblower
disclosures are reported to the General Counsel
and CEO and where appropriate, the Chair of the
Board to investigate and take appropriate action.
During FY22, we published our second Modern
Slavery Statement, which sets out the steps we
have taken to identify, manage and mitigate the
specific risks of modern slavery in our operations
and supply chain. We also have a Supplier Code of
Conduct, which outlines the behaviours we expect
from suppliers, particularly regarding ethical, social
and environmental business practices.
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Approving
strategic direction,
monitoring of
performance
Board
Governance
structures, policies
and objectives,
identification of
significant risk
Strategic
Direction
Risk Capacity
& Tolerance
Monitor the environment, respond to
stakeholder material issues, anticipate
long-term threats and opportunity
Risk management
and assurance
Risk management
Our risk management framework enables the Board
to set an appropriate risk strategy and ensure that
risk is managed throughout the organisation. The
framework ensures we have appropriate systems
in place to identify material risks and that, where
applicable, the Board sets appropriate tolerance
limits. We assign responsibility to individuals to
manage identified risks and we monitor any
material change to Contact’s risk profile.
Contact INTEGRATED REPORT 2022Governance matters
Contact’s enterprise risk management framework
is supported by a range of systems and tools that
help assess and report all risk types including
environmental, social and governance risks across
the organisation.
The Contact26 strategy has a strong focus on
ESG commitments to create long-term value.
A wide range of risks and environmental factors
are considered by the Board during the strategy
setting process including various climate-related
analyses performed by the team to support stronger
climate action practices in our decision-making.
Our corporate governance model is vertically
integrated to ensure an appropriate level of support
and oversight of our key climate-related risks.
• The full Board considers a wide range of risks
(including economic, environment, social and
governance risks) when reviewing the business
strategy alongside a market update. The reports
our teams produce ensure the Board understand
the key risks and issues (such as climate change)
that contribute to their decision-making.
• Top risks are reported to the Board Assurance
and Risk Committee on a quarterly basis,
reviewed with the full Board, and are actively
monitored by the Leadership Team.
• The Board Safety and Sustainability Committee
have formal oversight of climate-related issues
and regularly review all ESG risks across Contact.
• Risks rated high and above are regularly monitored
for active management by the leadership team.
• There is regular engagement with stakeholders
(including local communities and tangata whenua
in an area of growth as we aim to maintain our
positive relationships) to assess and communicate
the impacts of the changing environment.
• People at all levels of the organisation are
encouraged to identify and manage potential
risks to Contact.
There were no significant instances of non-
compliance with laws and regulations, no
fines were paid during the reporting period
and there were no critical concerns.
The integrated nature of our operations means that
climate-related risks are regularly assessed as part
of our strategic, operational and emerging risk
assessments. Mitigation plans for material risks are
implemented to proactively manage the impact
to Contact.
Auditors
We recognise that the role of our external auditor
is critical for the integrity of our financial reporting.
KPMG has been our external auditor since 2005.
The Audit and Risk Committee ensures that the
audit partner is changed at least every five years.
Following a formal request for proposal process,
Contact has elected to appoint Ernst & Young as the
Group’s new external auditor for the financial year
commencing 1 July 2022.
The change of auditor reflects Contact taking
a governance leadership stance, applying best
practice and developments in overseas regulation
around external auditor rotation.
Our External Audit Independence Policy sets out the
framework we use to ensure the independence of
our external auditors is maintained and their ability
to carry out their statutory audit role is not impaired.
Under this policy, the external auditor may not do
any work for Contact that compromises, or is seen
to compromise, the independence and objectivity of
the external audit process. In addition, the external
auditor confirms its continuing independent status
to the Board every six months.
The Chair of the Audit and Risk Committee approved
KPMG to perform additional engagements this year
including assuring our green borrowing programme,
greenhouse gas emissions and Global Reporting
Index (GRI) indicators.
Representatives from the external auditor KPMG
attend Contact’s annual shareholder meeting,
where they’re available to answer shareholders’
questions relating to the audit.
Board and Board Committees are provided with
ESG analysis and reporting
The Leadership Team review all management
materials and address mitigation plans for key risks
Management and staff across the business regularly
assess, review, analyse, monitor and report on all
risks (including ESG-related risks) within integrated
governance structures to ensure Contact takes a
proactive approach to mitigate risk impacts
Assurance
Our business assurance team fulfils our internal
audit function and provides objective assurance of
the effectiveness of our internal control framework.
The team is based in-house, and draws on external
expertise where required.
The team brings a disciplined approach to evaluating
and improving the effectiveness of risk management,
internal controls and governance processes. We use
a risk-based assurance approach driven by our risk
management framework. The team also assists
external audits by making findings from the internal
assurance process available for the external auditor to
consider when providing their opinion on the financial
statements. The team has unrestricted access to all
other departments, records and systems of Contact,
and to the external auditor and other third parties as
it deems necessary.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
67
Contact INTEGRATED REPORT 2022Governance matters Remuneration report
Dear fellow shareholders
I am pleased to present Contact’s remuneration report
for FY22 on behalf of the Board’s People Committee.
FY22 financial results and remuneration
Contact has delivered a solid financial result for shareholders this year with
profit of $182 million, EBITDAF1 of $537 million, and operating free cash flow1
of $325 million. Operating costs and capital expenditure have been managed
well, while contending with inflationary pressures and supply constraints.
Our discretionary short-term incentive pool reflects Contact’s performance
in FY22 and any payments under these arrangements to eligible participants
will be made in September 2022. Given the company’s performance over the
past year, we consider executive remuneration is appropriate.
We are committed to paying appropriate market rates for all roles, and
making sure people are rewarded for their performance and experience.
A detailed overview of current employee remuneration is set out in
Employee remuneration.
The Contact team has proven resilient and flexible through further changes in
Covid-19 alert levels and restrictions in FY22, ensuring minimal business disruption.
We know our people are key to our success and we are continuously looking for
ways to improve as part of our commitment to being a good employer. We have
made good progress and we look forward to continuing to make progress through
FY23 and beyond. You can read more about our overall employee proposition in
Transformative ways of working.
Jon Macdonald
Chair, People Committee
1 EBITDAF and operating free cash flow are non-GAAP (generally accepted accounting practice) measures.
Information regarding the usefulness, calculation and reconciliation of these measures is provided within
note A2 to the financial statements.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
68
Contact INTEGRATED REPORT 2022Governance matters
Details of the total remuneration paid to each Contact director for FY22 are as follows:
Audit
and Risk
Committee
Safety and
Sustainability
Committee
People
Committee
Development
Committee
Total
Remuneration
Directors
Board fees
Robert McDonald
$290,000
$290,000
$163,250
$166,458
Victoria Crone
$140,000
$23,250
Sandra Dodds**
$116,667
$38,750
$11,042
Jon Macdonald
$140,000
$26,500
$13,250
$179,750
Rukumoana
Schaafhausen
David Smol
Elena Trout
$140,000
$23,250
$13,250
$176,500
$140,000
$140,000
$13,250
$26,500
$26,500
$179,750
$13,250
$179,750
Dame Therese Walsh*
$23,333
$7,750
$2,208
$33,292
Total
$1,130,000
$93,000
$53,000
$39,750
$53,000
$1,368,750
* Dame Therese Walsh resigned from the Board on 31 August 2021.
** Sandra Dodds joined the Board on 1 September 2021 and replaced Dame Therese Walsh as Chair of the Audit and Risk Committee and
Member of the People Committee.
Directors’ remuneration
The total directors’ fee pool is $1,500,000 per year.
It has not been increased since it was approved by
shareholders in 2008. Actual fees paid to directors are
determined by the Board on the recommendation
of the People Committee. Between FY21 and FY22,
fees for Board and Committee fees increased by
around 2 percent, with a bigger increase for the
Development Committee to bring it in line with the
other Committees.
Directors' fees exclude GST, where appropriate.
In addition, Board members are reimbursed for
costs directly associated with carrying out their
duties, such as travel costs.
Contact employees appointed as directors of
Contact subsidiaries do not receive any director
fees. Chris Seel was a non-executive director of
Simply Energy Limited and was paid $18,000 in
director fees during FY22. Chris resigned from the
Simply Board on 11 March 2022. Dane Coppell is a
non-executive director of Western Energy Services
Limited and was paid $24,000 in director fees
during FY22.
FY22
Chair
per annum
Member
per annum
Board of Directors
$290,000*
$140,000
Audit and Risk
Committee
Safety and Sustainability
Committee
$46,500
$23,250
$26,500
$13,250
People Committee
$26,500
$13,250
Development Committee
$26,500
$13,250
* No additional fees are paid to the Board Chair for committee roles.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
69
Contact INTEGRATED REPORT 2022Governance matters
Contact employee remuneration
We’re committed to paying appropriate market
rates for all our roles, and ensuring our people are
rewarded for their performance and experience.
There are three parts to employee remuneration
– fixed remuneration, variable remuneration, and
other benefits. These combine to attract, reward
and retain high-performing employees.
In 2021, Contact amended its remuneration
framework so that only our senior people
remained eligible for any variable component of
remuneration, e.g. STI, LTI. Our people below senior
management were provided with a commensurate
increase to their fixed remuneration.
In FY22, Contact has 48 people with a component
of cash STI variable remuneration.
Fixed remuneration
Fixed remuneration is based on the role
responsibilities, individual performance and
experience, and current market remuneration
data. Contact targets fixed remuneration at the
median of the market range.
Variable remuneration
Variable remuneration recognises and rewards
high-performing senior employees and comprises
short-term incentives (cash and deferred share
rights) and long-term incentives (performance
share rights).
Short-term incentives (STI)
STIs are designed to recognise and reward high
performance with cash incentives and deferred
share rights through Contact’s equity scheme
for some higher-level roles and key talent. STIs
have a maximum potential level set reflecting the
person’s role grade, and are based on performance
measured against key performance indicators
(KPIs), which consist of company and individual
objectives. The Board reserves the right to adjust
STI awards if necessary.
Long-term incentives (LTI)
Contact provides awards of performance share
rights through Contact’s equity scheme to our
senior people and key talent. This aims to encourage
and reward longer-term decision-making and align
participants’ interests with Contact’s shareholders.
These are subject to performance hurdles.
Equity scheme
At 30 June 2022 there were 88 participants in
Contact’s equity scheme. For further details on the
equity scheme and the number of performance
share rights and deferred share rights granted,
exercised, lapsed and on issue at the end of the
reporting period, see note E10 of the financial
statements.
Other benefits
We know that rewards mean more than just
money, so we offer our people a range of other
benefits too. Some of these have eligibility criteria
and include: discounts for home energy and
broadband; employer-subsidised health insurance;
an employee share ownership plan called ‘Contact
Share’ (see note E11 in financial statements for
more detail); and additional benefits and offers
from retailers and service providers.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
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GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
70
Contact INTEGRATED REPORT 2022Governance matters Chief Executive Officer and Executive
Team remuneration structure
The CEO and Executive Team remuneration is
reviewed by our Board each year. The Board works
closely with and is advised by Contact’s People
Committee.
The remuneration reflects the complexity of the
roles and the wide-ranging skills needed to do
them well. We also consider market remuneration
data benchmarks, look at the achievement of
performance goals and factor in creating long-
term sustainable shareholder value.
The total remuneration is made up of a fixed
remuneration component, which includes cash
salary and other employment benefits, and
variable remuneration containing short-term
incentives (cash and equity awarded through
deferred share rights) and long-term incentives
(equity awarded through performance share rights).
The CEO and Executive Team variable remuneration is structured as follows:
Scheme
Description
Performance measures
Cash STI
Cash STI is a
discretionary
scheme based
on achievement
of KPIs.
Equity STI
(awarded
as deferred
share rights)
Equity LTI
(awarded as
performance
share rights)
Equity STI allows
the participant
to acquire shares
at a $0 exercise
price subject to
a tenure hurdle.
Equity LTI allows
the participant
to acquire shares
at a $0 exercise
price subject
to the exercise
hurdle being
achieved.
70% based on corporate shared KPIs:
• 40% financial results (operating free cash flow1, EBITDAF1, OPEX)
• 15% safety targets
• 30% strategy delivery and key operational milestone targets
• 15% transformation targets
30% based on individual KPIs.
Executive Team individual KPIs are a mix of shared objectives and
goals specific to each individual.
The CEO individual KPIs for the year ending 30 June 2022
including leadership performance of Contact's key strategic
initiatives, leadership of the executive team and stakeholder
engagement.
The participant’s performance rating influences
the Equity STI awarded by the Board.
The exercise hurdle to receive these is to remain employed by
Contact 2 years from the grant date.
The exercise hurdles to receive these are:
• 50% Contact’s relative total shareholder return (TSR) ranking
within an energy industry peer group of other New Zealand
NZX50 listed utilities companies.
• 50% internal hurdle related to our strategic priority of
decarbonisation. For the issue in FY22 this included renewable
generation development, stimulation of the transition of fossil
fuel usage to electricity, and the delivery of our Tauhara power
station.
Tested once, at year 3.
Potential
Executive Team
maximum
potential 35%
of base salary.
CEO maximum
potential 50%
of base salary.
Executive Team
maximum potential
30% of base salary.
CEO maximum
potential 30%
of base salary.
Executive Team
set at 20% of base
salary.
CEO set at 35%
of base salary.
1 EBITDAF and operating free cash flow are non-GAAP (generally accepted accounting practice) measures. Information regarding the
usefulness, calculation and reconciliation of these measures is provided within note A2 to the financial statements.
CONTENTS
FY22 SUMMARY
WHO WE ARE
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VALUE
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GOVERNANCE
MATTERS
ADDITIONAL
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FINANCIAL
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71
Contact INTEGRATED REPORT 2022Governance matters
CEO remuneration
The following table details the nature and amount of remuneration paid to Mike Fuge for his time
as CEO during the year. The structure of the CEO remuneration is detailed on the previous page.
The scenario chart below demonstrates the elements
of Mike Fuge’s CEO remuneration design for FY22.
CEO remuneration for the period ended 30 June 2022
Position
Fixed remuneration
Pay-for-performance remuneration
Salary
paid
$
Benefits
$
Subtotal
$
Cash STI
$
Equity
STI $
Equity
LTI $
Subtotal
$
Total
remuneration
$
FY22
1,150,000
48,7131 1,198,713
329,5902
197,8003 402,5004
929,890
2,128,603
Five-year CEO remuneration summary
Total
remuneration
paid5
Percentage
Cash STI
awarded
against
maximum
Percentage
vested Equity
STI against
maximum
Span of
Equity STI
performance
period
Percentage vested
Equity LTI against
maximum
Span of
Equity LTI
performance
period
0%
0%
0%
n/a
n/a
n/a
0%
0%
0%
n/a
n/a
n/a
Financial
year
Mike Fuge
FY22
FY21
FY206
$2,128,603
$2,280,840
$669,641
Dennis Barnes
FY207
$995,566
FY19
$1,787,816
FY18
$3,031,608
57%
75%
40%
32%
78%
55%
Equity LTI
Equity STI
Cash STI
Base salary & benefits
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
$0
Maximum
potential
remuneration
On-plan
remuneration
Fixed
remuneration
1 Benefits include 3% KiwiSaver contribution calculated on
remuneration amounts including cash STI, and health insurance.
100%
2017–2019
2018–2019
2015 Options/PSR 89.54%
2016 Options/PSR 50%
2015–2020
2016–2020
2 STI for FY22 period 57% of maximum potential, paid in FY23
(September 2022).
100%
2016–2018
2013 Options 100%8
2014 Options 100%
2013–2018
2014–2019
3 Equity STI, 57% of maximum potential, based on fair value
allocation. To be granted 1 October 2022 and tested October 2024.
100%
2015–2017
0%
n/a
4 Equity LTI is based on fair value allocation. To be granted
1 October 2022 and tested October 2025.
5 Total remuneration paid includes salary, benefits, Cash STI,
and value of STI and LTI Equity (paid in shares).
Five-year summary TSR9 performance graph
Company
NZX50
Peer group10
6 24 February 2020 – 30 June 2020
40%
30%
20%
10%
0%
-10%
30 June 2018
30 June 2019
30 June 2020
30 June 2021
30 June 2022
6.01%
2.75%
-8.05%
7 1 July 2019 – 28 February 2020
8
100% of STI and LTI Equity vested as a result of Origin selling its
shareholding in Contact triggering vesting of equity due to the
change of control.
9 TSR calculated using the volume-weighted average price for
the 3 months prior to year end.
10 Peer group is a simple average of Meridian, Genesis, Mercury,
Vector and Trustpower, with Trustpower only in the group
from FY18.
CONTENTS
FY22 SUMMARY
WHO WE ARE
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FINANCIAL
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72
Contact INTEGRATED REPORT 2022Governance matters Group1 employees who earn over $100k
The table shows the number of our people
(including any who have left) who received
remuneration and other benefits during FY22 of
at least $100,000 for the year ended 30 June 2022.
The value of remuneration benefits analysed
includes:
• fixed remuneration including allowance/overtime
payments
• employer superannuation contributions
• short-term cash incentives relating to FY21
performance but paid in FY22 (Contact and
Simply Energy)
• the value of equity-based incentives at fair
value allocation received during FY22 (Contact)
• the value of Contact Share received during
FY22 (Contact)
• redundancy and other payments made on
termination of employment.
The figures do not include amounts paid after
30 June 2022 that relate to the year ended
30 June 2022 or the remuneration (and any other
benefits) of the Contact CEO, Mike Fuge, as this is
disclosed in CEO remuneration.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
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THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
73
1 Excludes Drylandcarbon and Forest Partners.
Table of employees who earn over $100k
Remuneration band
Number of employees
Remuneration band
Number of employees
$100,001–$110,000
$110,001–$120,000
$120,001–$130,000
$130,001–$140,000
$140,001–$150,000
$150,001–$160,000
$160,001–$170,000
$170,001–$180,000
$180,001–$190,000
$190,001–$200,000
$200,001–$210,000
$210,001–$220,000
$220,001–$230,000
$230,001–$240,000
$240,001–$250,000
$250,001–$260,000
$260,001–$270,000
$270,001–$280,000
$280,001–$290,000
$290,001–$300,000
$300,001–$310,000
$310,001–$320,000
$320,001–$330,000
$330,001–$340,000
$360,001–$370,000
$370,001–$380,000
$390,001–$400,000
$400,001–$410,000
$420,001–$430,000
$430,001–$440,000
$450,001–$460,000
$460,001–$470,000
$510,001–$520,000
$540,001–$550,000
$550,001–$560,000
$560,001–$570,000
$580,001–$590,000
$620,001–$630,000
$630,001–$640,000
$660,001–$670,000
$670,001–$680,000
$720,001–$730,000
$800,001–$810,000
$830,001–$840,000
$940,001–$950,000
$1,170,001–$1,180,000
2
1
2
1
1
1
1
1
1
1
1
1
1
1
1
1
1
Grand Total
571*
* Includes 42 former employees across the group
(excluding Drylandcarbon and Forest Partners).
47
51
52
56
55
52
46
36
27
12
13
9
16
13
11
15
4
10
3
2
4
3
2
1
4
1
2
3
2
Contact INTEGRATED REPORT 2022Governance matters Gender pay reporting
Contact's pay reporting
Contact's commitment
One of the principles of our Tikanga (our moral
compass) is to put our energy into things that
matter. Being inclusive, encouraging diversity and
expressions of ideas and opinions is a key focus of
that. We are committed to building a workforce
that reflects, and is inclusive of, the diverse
communities of Aotearoa.
Understanding our pay reporting
Pay reporting is broadly defined as:
Gender parity – is when men and women are
equally represented at all levels at Contact.
Gender pay gap – is the gap between the pay of
women and the pay of men.
Pay gap calculation:
average male hourly rate –
average female hourly rate
average male hourly rate
Closing the gender pay gap typically relies on
addressing all of these elements. Pay equity (equal
pay for equal work) will typically not close the overall
gender gap especially if genders are not equally
represented at each level of the organisation.
Gender pay equity – is equal pay for equal work –
that is people undertaking the same work (i.e. roles
requiring a similar level of skills, knowledge, and
accountabilities) being paid the same regardless of
gender. (Note, Equal pay is a legal requirement in
New Zealand. We have processes and monitoring
in place to ensure our people are treated and paid
fairly, meeting both our legal and moral obligations.)
Pay equity calculation:
average female
(fixed remuneration/midpoint of salary range)
average male
(fixed remuneration/midpoint of salary range)
CONTENTS
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74
We recognise and respect that gender is not binary.
For this reporting we have calculated our gender pay
equity and pay gap only as the difference between
those who identify as Woman and Men (around 1.5%
of our people identify as gender diverse).
Contact's average pay gap is 32.7% (median 50.2%).
There are two key drivers of our gender pay gap. The
first being a higher proportion of our women in our
customer channels and secondly a lower proportion
of woman in highly skilled energy roles. Closing our
gaps requires us to improve the gender balance
with these areas.
Contact's pay equity sits at 95.2%. We assess all
roles at Contact based on the skills, capability
and experience required for the role. We then use
market data to apply an appropriate remuneration
range for each role. Roles are then grouped into pay
bands, which cluster similar sized roles together.
The bands contain different roles that may be filled
by people with a range of experience. This can
include people recently promoted into higher roles
or bands, and who sit at the lower end of the range.
Each year, as part of our annual salary review
we review all our data to ensure that we are
maintaining our commitment to gender pay
equity, and make adjustments if required.
We remain committed to achieving more
balance of gender across all levels at Contact.
We’re implementing a number of initiatives to
drive improvement, including external partners to
improve female participation in some historically
male dominated fields, applying gender
recruitment targets where appropriate to increase
the representation of women, and a continued
focus to promote women internally into more
senior level roles.
We recognise that these activities will take time
to have an impact.
Additional Contact remuneration
disclosures
• CEO-to-employee pay ratio, 29:1. The ratio
between the total annual compensation of the
CEO and the median employee compensation.
• Contact does not implement any clawback
practices on employee remuneration other than
in situations permitted by Aotearoa New Zealand
legislation (e.g. for correction of overpayments).
• Contact has remediated underpayments to our
current and ex-employees following a review of
how we applied the regulations in the Holidays
Act 2003.
• Contact does not have a share ownership
requirement for the CEO or Executive Team.
• The notice period for Mike Fuge in his role as
CEO is six months.
Career Level
Executive
Strategic Senior Management
Operational Management/National Specialist
Team Leader/Technical Specialist
Team Member
Overall
% Women
population
% Men
population
Pay Equity
Pay Gap
0.2%
1.0%
4.5%
15.2%
25.8%
46.6%
0.8%
3.0%
9.0%
32.8%
7.8%
53.4%
N/A
96.9%
96.3%
97.2%
100.9%
95.2%
12.1%
3.1%
7.9%
13.5%
1.6%
32.7%
Contact INTEGRATED REPORT 2022Governance matters
Additional
disclosures
CONTENTS
FY22 SUMMARY
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75
Contact INTEGRATED REPORT 2022Additional disclosures Statutory disclosures
Disclosures of interests by directors
The table below lists the general disclosures of interest by directors of
Contact Energy Limited as at 30 June 2022 in accordance with section
140 of the Companies Act 1993.
Robert McDonald
University of Auckland Council
University of Auckland Business School Advisory Board
Fletcher Building Limited
AIA Limited
Chartered Accountants Australia & New Zealand
Victoria Crone
Statistics New Zealand
Callaghan Innovation*
Figure.NZ
ASB Bank Limited
Variety – the Children’s Charity
*Resigned effective 15 July 2022
Sandra Dodds
Beca Group Limited
Member
Chair
Director
Director
Director
Chair
Chief Executive
Officer
Chair
Director
Chair
Director
Snowy Hydro Limited (Australian Government owned entity)
Director
OceanaGold Limited (listed TSX & ASX)
Director
Jon Macdonald
Sharesies Limited and various subsidiaries
Director
Titan Parent New Zealand Limited (Parent company of Trade Me Ltd). Director
Mitre 10 (New Zealand) Ltd and various subsidiaries
My Food Bag Group Limited
Summer of Technology Limited
Director
Director
Director
Rukumoana Schaafhausen
Alvarium Investments (NZ) Limited
Three Waters National Transition Unit Board
AgResearch Limited
KGS Limited
Director
Board Member
Director
Chair
Te Waharoa Investments Limited
Managing Director
Miro (Hautupua) Limited
Water Governance Board, Waikato District Council
Tindall Foundation
Princes Trust NZ
Equippers Church Trust
David Smol
New Zealand Growth Capital Partners Limited
Department of Internal Affairs’ External Advisory Committee
Ministry of Social Development’s Risk and Audit Committee
Chair
Director
Trustee
Trustee
Trustee
Chair
Chair
Chair
New Zealand Transport Agency
Board Member
GeoNet Advisory Panel
The Co-operative Bank Limited
Victoria Link Limited
Elena Trout
Te Rāhui Herenga Waka Whakatāne Limited
Citycare Limited
Hāpaitia Limited
Ara Ake Limited
Waihanga Ara Rau Construction and Infrastructure Workforce
Development Council
Callaghan Innovation
Chair
Director
Chair
Independent Director
Independent Director
Director
Director
Co-Chair
Director
Ngāpuhi Asset Holding Company Limited and various subsidiaries Director
Joint NZ Defence Force and Ministry of Defence Capability
Governance Board (CGB)
External Member
Energy Efficiency and Conservation Authority (EECA)
Chair
Harrison Grierson Holdings Limited and various subsidiaries
Director
Motiti Investments Limited
Director
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
76
Contact INTEGRATED REPORT 2022Additional disclosures Information used by Directors
No director issued a notice requesting to use information received in his or her
capacity as a director that would not otherwise be available to the director.
Indemnity and insurance
In accordance with section 162 of the Companies Act 1993 and the constitution
of the company, Contact has continued to indemnify and insure its directors
and officers, including directors of subsidiaries, against potential liability or
costs incurred in any proceeding, except to the extent prohibited by law.
Directors’ security participation
The Contact Board has determined that directors should hold a minimum of
20,000 Contact shares within three years of appointment to further align the
interests of directors with the interests of shareholders.
Securities of the company in which each director has a relevant interest
at 30 June 2022
Director
Ordinary shares
Bonds
Capital Bonds
Robert McDonald
Victoria Crone*
Sandra Dodds
Jon Macdonald
Rukumoana Schaafhausen
David Smol
Elena Trout
34,602
21,860
15,170
23,930
–
21,201
21,978
35,000
Jon
Macdonald
20,000
* In addition, Victoria Crone has an interest in 4,401 ordinary shares as a trustee of a family trust.
David Smol
15/9/21
30/3/22
Elena Trout
15/9/21
30/3/22
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
77
Securities dealings of directors
During the year, Contact directors acquired a relevant interest in securities
as follows. Consideration per share/bond is stated in NZD unless otherwise
specified.
Director
Date of
acquisition
Nature of
transaction
Victoria Crone 30/3/22
Sandra Dodds 12/11/21
30/3/22
21/6/22
15/9/21
19/11/22
30/3/22
Consideration
per share/
bond
Number
of shares/
bonds
acquired
$7.8750
327
AUD$7.710350
10,000
$7.8750
170
AUD$6.500000
5,000
$8.1127
503
$1.00
20,000
$7.8750
359
$8.1127
380
$7.8750
271
$8.1127
462
$7.8750
330
Acquisition of
ordinary shares
under DRP
On-market purchase
of ordinary shares
Acquisition of
ordinary shares
under DRP
On-market purchase
of ordinary shares
Acquisition of
ordinary shares
under DRP
Acquisition of Capital
Bonds (CEN060)
upon allotment
Acquisition of
ordinary shares
under DRP
Acquisition of
ordinary shares
under DRP
Acquisition of
ordinary shares
under DRP
Acquisition of
ordinary shares
under DRP
Acquisition of
ordinary shares
under DRP
Contact INTEGRATED REPORT 2022Additional disclosures
Shareholder statistics
Twenty largest shareholders at 30 June 2022
Number of
ordinary shares
% of ordinary
shares
National Nominees New Zealand Limited
HSBC Nominees (New Zealand) Limited
Citibank Nominees (Nz) Ltd
HSBC Nominees (New Zealand) Limited
Custodial Services Limited
JPMORGAN Chase Bank
Accident Compensation Corporation
FNZ Custodians Limited
Bnp Paribas Nominees NZ Limited Bpss40
New Zealand Superannuation Fund Nominees
Limited
JBWERE (Nz) Nominees Limited
Forsyth Barr Custodians Limited
Tea Custodians Limited
New Zealand Depository Nominee
Premier Nominees Limited
New Zealand Permanent Trustees Limited
Cogent Nominees Limited
J P Morgan Nominees Australia Pty Limited
Private Nominees Limited
Bnp Paribas Nominees NZ Limited
66,016,208
54,804,047
53,010,232
51,426,514
51,081,577
40,971,392
30,455,807
28,570,447
26,445,282
22,075,119
18,946,648
18,811,091
15,161,019
12,079,808
11,113,172
9,558,863
9,398,708
8,142,487
7,991,457
7,082,957
8.46
7.02
6.79
6.59
6.54
5.25
3.9
3.66
3.39
2.83
2.43
2.41
1.94
1.55
1.42
1.22
1.2
1.04
1.02
0.91
Total for top 20
543,142,835
69.57
Distribution of ordinary shares and shareholders at 30 June 2022
Size of holding
1–1,000
1,001–5,000
5,001–10,000
10,001–50,000
50,001–100,000
100,001 and over
Number of
shareholders
% of
shareholders
Number of
ordinary
shares
% of
ordinary
shares
27,209
28,217
3,501
2,432
195
117
44.12
17,290,030
45.75
52,170,579
5.68
3.94
0.32
24,670,723
46,793,804
13,573,385
2.21
6.68
3.16
5.99
1.74
0.19
626,139,782
80.21
Total
61,671
100.00
780,638,303
100.00
Substantial product holders
According to notices given under the Financial Markets Conduct Act 2013,
the following persons were substantial product holders of the company as at
30 June 2022:
Substantial product
holder
Number of ordinary shares in
which relevant interest is held
Date of notice
Milford Asset Management
Limited
47,603,648 26 January 2022
The total number of voting securities of Contact at 30 June 2022 was
780,638,303 fully paid ordinary shares.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
78
Contact INTEGRATED REPORT 2022Additional disclosures
Bondholder statistics
Twenty largest CEN040 bondholders at 30 June 2022
Twenty largest CEN050 bondholders at 30 June 2022
Number of
CEN040 bonds
% of CEN040
bonds
Number of
CEN050 bonds
% of CEN050
bonds
Citibank Nominees (Nz) Ltd
Custodial Services Limited
FNZ Custodians Limited
Bnp Paribas Nominees NZ Limited Bpss40
HSBC Nominees (New Zealand) Limited
Cogent Nominees Limited
Southern Cross Medical Care Society
Forsyth Barr Custodians Limited
Private Nominees Limited
Tea Custodians Limited
Investment Custodial Services Limited
NZ Permanent Trustees Ltd Grp Invstmnt
Fund No 20
Forsyth Barr Custodians Limited
JBWERE (Nz) Nominees Limited
Hobson Wealth Custodian Limited
FNZ Custodians Limited
Forsyth Barr Custodians Limited
Xiaofeng Chen
FNZ Custodians Limited
Dunedin City Council
Total for top 20
18,922,000
13,264,000
12,062,000
7,684,000
7,038,000
5,785,000
4,000,000
3,967,000
2,527,000
2,404,000
2,233,000
1,537,000
1,418,000
1,288,000
1,070,000
966,000
936,000
638,000
609,000
600,000
18.92
13.26
12.06
7.68
7.04
5.79
4.00
3.97
2.53
2.4
2.23
1.54
1.42
1.29
1.07
0.97
0.94
0.64
0.61
0.60
Custodial Services Limited
FNZ Custodians Limited
Bnp Paribas Nominees (Nz) Limited
Bnp Paribas Nominees NZ Limited Bpss40
Citibank Nominees (Nz) Ltd
HSBC Nominees (New Zealand) Limited
Westpac Banking Corporation
Forsyth Barr Custodians Limited
Cogent Nominees Limited
Tea Custodians Limited
Forsyth Barr Custodians Limited
University Of Otago Foundation Trust
JBWERE (Nz) Nominees Limited
HSBC Nominees (New Zealand) Limited
Investment Custodial Services Limited
Mt Nominees Limited
Private Nominees Limited
NZ Permanent Trustees Ltd Grp Invstmnt
Fund No 20
FNZ Custodians Limited
Woolf Fisher Trust Inc
22,325,000
11,462,000
10,500,000
6,850,000
4,580,000
4,530,000
3,932,000
3,769,000
3,766,000
3,050,000
2,345,000
1,750,000
1,747,000
1,300,000
1,265,000
1,241,000
1,000,000
998,000
988,000
950,000
22.33
11.46
10.5
6.85
4.58
4.53
3.93
3.77
3.77
3.05
2.35
1.75
1.75
1.30
1.26
1.24
1.00
1.00
0.99
0.95
88,948,000
88.96
Total for top 20
88,348,000
88.36
Distribution of CEN040 bonds and bondholders at 30 June 2022
Distribution of CEN050 bonds and bondholders at 30 June 2022
Size of holding
1,001–5,000
5,001–10,000
10,001–50,000
50,001–100,000
100,001 and over
Total
Number of
bondholders
% of
bondholders
Number of
bonds % of bonds
Size of holding
Number of
bondholders
% of
bondholders
Number of
bonds % of bonds
33
66
143
13
28
283
11.66
23.32
50.53
4.59
9.89
165,000
631,000
3,762,000
996,000
0.17
0.63
3.76
1.00
1,001–5,000
5,001–10,000
10,001–50,000
50,001–100,000
94,446,000
94.45
100,001 and over
100.00
100,000,000
100.00
Total
6
41
105
20
26
198
3.03
20.71
53.03
10.10
13.13
30,000
401,000
2,765,000
1,496,000
0.03
0.40
2.77
1.50
95,308,000
95.31
100.00
100,000,000
100.00
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
79
Contact INTEGRATED REPORT 2022Additional disclosures
Twenty largest CEN060 bondholders at 30 June 2022
Number of
CEN060 bonds
% of CEN060
bonds
Forsyth Barr Custodians Limited
JBWERE (Nz) Nominees Limited
Custodial Services Limited
53,984,000
33,924,000
31,563,000
New Zealand Permanent Trustees Limited
19,289,000
Hobson Wealth Custodian Limited
National Nominees New Zealand Limited
FNZ Custodians Limited
Forsyth Barr Custodians Limited
Tea Custodians Limited
Adminis Custodial Nominees Limited
Mmc Limited
Francis Horton Tuck
Bnp Paribas Nominees NZ Limited Bpss40
Investment Custodial Services Limited
University Of Otago Foundation Trust
Fletcher Building Educational Fund
Hobson Wealth Custodian Limited
Jml Capital Limited
Thomas Hermann Grothe
CONTENTS
Forsyth Barr Custodians Limited
14,999,000
14,662,000
10,738,000
4,201,000
3,481,000
2,007,000
1,800,000
1,640,000
1,632,000
1,522,000
1,000,000
900,000
809,000
650,000
630,000
418,000
23.99
15.08
14.03
8.57
6.67
6.52
4.77
1.87
1.55
0.89
0.80
0.73
0.73
0.68
0.44
0.40
0.36
0.29
0.28
0.19
Directors of Contact Energy Limited and subsidiaries
The following people held office as directors of Contact Energy Limited
as at 30 June 2022: Robert McDonald, Victoria Crone, Sandra Dodds,
Jon Macdonald, Rukumoana Schaafhausen, David Smol and Elena Trout.
Sandra Dodds was appointed in September 2021 and Dame Therese Walsh
left the Board in August 2021.
The below table lists the subsidiaries of Contact Energy Limited and the
people who held office as directors as at 30 June 2022.
Company name
Directors
Further information
Simply Energy
Limited
Dorian Devers
Murray Dyer
James Flannery
Jacqui Nelson
Stephen Peterson
Western Energy
Services Limited
Contact Energy
Risk Limited
Dane Coppell
Dorian Devers
Michael Dunstall
Jacqui Nelson
Antony Balfour Will
Dorian Devers
Mike Fuge
Jacqui Nelson was appointed
effective 19 October 2021. James
Flannery was appointed effective
27 April 2022. Christopher Seel
ceased being a director on
11 March 2022. Catherine
Thompson ceased being a director
on 19 October 2021. James Kilty
ceased being a director on
26 July 2021.
Jacqui Nelson was appointed
effective 19 October 2021.
Catherine Thompson ceased
being a director on 19 October
2021. James Kilty ceased being
a director on 29 July 2021.
Contact Energy Risk Limited was
duly incorporated on 18 May 2022
as an international company with
its registered office in the Cook
Islands.
FY22 SUMMARY
Total for top 20
199,849,000
88.84
NZX waivers
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
80
Distribution of CEN060 bonds and bondholders at 30 June 2022
Size of holding
1,001–5,000
5,001–10,000
10,001–50,000
50,001–100,000
100,001 and over
Total
Number of
bondholders
% of
bondholders
Number of
bonds % of bonds
78
228
381
50
55
792
9.85
28.79
48.11
6.31
6.94
390,000
2,236,000
9,742,000
4,082,000
0.17
0.99
4.33
1.81
208,550,000
92.69
100.00
225,000,000
100.00
There were no waivers granted by NZX or relied on by Contact in the
12 months preceding 30 June 2022.
Stock exchange listings
Contact’s ordinary shares are listed and quoted on the NZX Main Board and
the Australian Securities Exchange (ASX) under the company code ‘CEN’.
Contact has two tranches of green retail bonds listed and quoted on the
NZX Debt Market under the company codes ‘CEN040’ and ‘CEN050’, and
one tranche of green capital bonds listed and quoted on the NZX Debt
Market under the company code ‘CEN060’. Contact’s listing on the ASX is as
a Foreign Exempt Listing. For the purposes of ASX listing rule 1.15.3, Contact
confirms that it continues to comply with the NZX listing rules.
Contact INTEGRATED REPORT 2022Additional disclosures
Exercise of NZX disciplinary powers
NZX did not exercise any of its powers under Listing Rule 9.9.3 in relation to
Contact during FY22.
Auditor fees
KPMG has continued to act as auditors of the company. The amount payable
by Contact and its subsidiaries to KPMG as audit fees in respect of FY22
was $568,000. The fees for other services undertaken by KPMG during FY22
totalled $100,500. These related to other assurance activities: reasonable
assurance reviews of Contact’s green borrowing programme and
greenhouse gas emissions reporting, and a limited assurance review
of Contact’s GRI reporting.
Donations
In accordance with section 211(1)(h) of the Companies Act 1993, Contact
records that it donated $199,688 in FY22 including charitable donations,
and where we have given a koha. Donations are made on the basis that the
recipient is not obliged to provide any service such as promoting Contact’s
brand and are separate from Contact’s sponsorship activity. No political
contributions were made during the year.
Contact spent $714,054 in the community and supported 111 initiatives
through sponsorship, donations and partnerships. Our people spent
474 hours volunteering with 17 organisations in their communities.
Credit rating
Contact Energy Limited has a Standard & Poor's long-term credit rating
of BBB/stable and short term rating of A-2.
The $100 million unsubordinated, unsecured fixed rate bonds issued
in February 2017 are rated BBB by Standard & Poor's.
The $100 million unsubordinated, unsecured fixed rate bonds issued
in March 2019 are rated BBB by Standard & Poor's.
The $225 million subordinated, unsecured, redeemable, fixed rate capital
bonds issued in November 2021 are rated BB+ by Standard & Poor’s.
Sustainability disclosures
All sustainability disclosures are for 1 July 2021 to 30 June 2022 unless stated
otherwise. Reported data is for Contact only unless stated otherwise.
Scope 1 emissions Contact, Simply Energy and Western Energy
All emissions reported are for Contact, Simply Energy and Western Energy.
Emissions from Drylandcarbon and Forest Partners are not reported,
however are considered minimal.
Emissions (tCO2e)
Thermal Generation
Emission Intensity
(tCO2e per MWh)
Total Generation
Emission Intensity
(tCO2e per MWh)
FY22
FY21
FY22
FY21
FY22
FY21
Fuel used
for thermal
generation
Fuel used for
geothermal
generation
Total fuel
used for
generation
Fuel used in
vehicles
Fugitive
emissions –
SF6
604,929
866,013
181,615
178,524
786,544 1,044,537
0.578
0.544
0.095
0.124
297
178
1
29
Total Scope 1 786,842 1,044,744
Scope 2 emissions Contact, Simply Energy and Western Energy
FY22 tCO2e
FY21 tCO2e
Contact – electricity consumption
1,394
1,300
Simply Energy – electricity consumption
Western Energy – electricity consumption
Total Scope 2
3
2
3
N/A
1,399
1,303
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
81
Contact INTEGRATED REPORT 2022Additional disclosures Scope 3 emissions Contact, Simply Energy and Western Energy
External commitments
Purchased goods and services
Capital goods
FY22 tCO2e
FY21 tCO2e
6,371
57,876
16,699
41,726
Fuel- and energy-related activities
149,743
330,207
Upstream distribution and transportation
Waste
Business travel
Employee commuting
Use of sold products
Downstream leased assets
Total Scope 3
444
108
567
832
27
149
263
306
178,554
165,259
289
399
394,784
555,035
Total Scope 1, 2 & 3 emissions Contact, Simply Energy and Western Energy
Total emissions
Total solid waste disposed
Total waste generated
(metric tonnes)
Total waste used/recycled/
sold (metric tonnes)
FY22 tCO2e
FY21 tCO2e
1,183,025
1,601,082
FY22
91.7
FY21
132.0
FY20
108.6
FY19
126.1
0.7
6.0
3.6
3.4
We do not track used/recycled/sold waste for all our sites of operation, figures indicate recycled waste
where tracked.
Direct mercury emissions
Direct mercury emissions
(metric tonnes)
FY22
0.202
FY21
0.079
FY20
0.174
FY19
0.303
Organisation/
Group
Date of
adoption Commitment
Wellbeing Tick
workplace
accreditation
February
2022
Climate
Leaders
Coalition
July
2019
Rainbow Tick
workplace
accreditation
November
2018
We've committed to a partnership with The Wellbeing
Tick Workplace Accreditation programme, which will
see Contact systemically design wellbeing into the
way we work, to enable our people to thrive. Aiming for
accreditation in Feb 2023.
• To measure our greenhouse gas emissions, have them
independently verified and publicly report on them.
• Adopt targets grounded in science that will deliver
substantial emissions reductions so organisations
contribute to being carbon neutral by 2050. These
targets will be considered in current planning cycles.
• Assess our climate change risks and
publicly disclose them.
• Proactively support our people to reduce their
emissions.
• Proactively support our suppliers to reduce their
emissions.
• Committed to the Paris Agreement Target to keep
warming below 2°C and to further pursue efforts to
limit temperature increases to 1.5°C.
We continue to retain The Rainbow Tick and are
committed to creating an inclusive and diverse
workplace environment in which differences in gender,
age, ethnicity, religion, sexual orientation, gender
identity, background and experience are valued.
Science
Based Targets
initiative –
Committed
Champions
for Change
reporting
initiative
March
2018
We commit to progressing emission
reduction in line with verified target.
November
2015
We continue to partner with Global Women on the
Champions for Change reporting initiative, which
monitors the collective and individual progress of
participating organisations towards our shared goal of
between 40–60 percent of women in our organisations,
at all levels.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
82
Contact INTEGRATED REPORT 2022Additional disclosures
Climate-related risks and opportunities
The following table presents an overview of Contact’s most material
climate-related risks and opportunities in the short, medium and long
term. We review these annually.
In 2019, we commissioned NIWA to model the potential impacts of climate
change on our operations. We modelled two scenarios: a business-as-
usual scenario where greenhouse gas concentrations continue unabated
(Representative Concentration Pathway 8.5); and a mitigation scenario with a
global effort to heavily reduce concentrations (RCP 2.5). Under either scenario
used we saw that most sites will experience a tripling of the number of hot
days, with spring and summer expected to become drier and winter wetter.
Our hydro catchment is likely to have increased inflows, with potential for
hydro generation increasing – especially under the business-as-usual scenario.
Given this, and also what we know about the transitional risks of climate
change, such as changing regulation, stakeholder expectations and market
dynamics, we have identified a range of risks which we have then rated as
low, medium, or high based on the likelihood, time-horizon and potential
impact/size of the opportunity or risk.
We use our existing risk management systems to capture, monitor and
report on climate-related risks. Risks rated high are also monitored by the
leadership team and the Board Audit and Risk Committee. The Board Health,
Safety and Environment Committee, who have formal oversight of climate
related issues, also review the climate-related risks. The full Board, when
setting strategy, also considers a wide range of risks and environmental
factors, and the work that our teams do to understand issues such as climate
change contributes to their decision-making.
Short term (now–2023)
Medium term (2023–2035)
Long term (2035–onwards)
These may impact near-term financial results,
including those that may materialise within the
current reporting cycle.
May materially impact financial results over the
longer term and may require us to adjust our
strategy.
Risks that could fundamentally impact the long-
term strategy and business model.
Market transition risks and opportunities
Contact’s emissions
profile
• Reputational impact of continued use of thermal
• National imperative to reduce carbon emissions
• Stakeholder rejection of fossil fuels including
and high-emissions generation.
through policy and other means.
natural gas.
Leading the market
to decarbonise
• Heightened scrutiny from customers and
investors on environmental, social, governance
(ESG) performance of businesses.
• Rising gas and carbon costs.
• Rising stakeholder expectations increase the
pace of change in which businesses must adapt/
respond to climate-related issues.
• Increased opportunity for renewable
developments.
• New opportunities and markets developed to
support low-carbon transition activities.
• Opportunity to deepen relationships with
customers who are looking to decarbonise.
• Heightened scrutiny of emissions from
geothermal energy generation.
• Leadership of decarbonisation initiatives
including delivering on science-based targets.
• Transition to lower-carbon economy creates more
demand for electricity.
• Opportunities for innovative customer and
technology solutions.
• Increased electricity demand.
• Increased demand for green energy products/
certification.
• Wider options for new generation development.
Thermal transition
• Opportunity for renewable generation to displace
thermal.
• Potential for high-emissions industries to favour
gas as a transition fuel, resulting in increased gas
use and emissions in the short term.
• Continued requirement for thermal peaking plant in
Aotearoa New Zealand to ensure affordable security
of supply.
• Opportunity to develop ThermalCo.
• Ensuring an orderly transition to a low-emissions
energy sector.
• Potential for significant renewable overbuild, and
massive distributed generation.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
83
Contact INTEGRATED REPORT 2022Additional disclosures
Short term (now–2023)
Medium term (2023–2035)
Long term (2035–onwards)
New technology
• Customer adoption of new technologies and/or
• Customer adoption of new technologies and/or
• New technology makes current generation
energy-efficient solutions impacts on demand for
grid-connected electricity.
energy-efficient solutions impacts on demand for
grid-connected electricity.
• Opportunity for smart solutions for customers to
• Opportunity for innovative new energy sources
assist decarbonisation.
e.g. hydrogen.
• Increase in demand due to changing industry
energy requirements.
redundant and/or impacts demand significantly.
Regulation
• Changes to regulation impacts on costs of
business and/or licence to operate.
• New regulation requires Contact to offset or
reduce emissions faster than planned.
• Aotearoa New Zealand’s costs become higher
relative to globe which results in production
moving offshore and reduced demand.
Physical risks and opportunities
Temperature
increases
• Changes to maintenance requirements as
• Impacts on operational plant may require change
temperatures increase.
in design.
• Changes to electricity demand as temperatures
change.
• Health, safety and wellbeing impacts on people
working in warmer conditions.
• Impacts on the efficiency and availability of
generation plants.
• Implications on resource consent requirements
which may increase costs and/or impact on
licence to operate.
• Increased demand and competition for natural
resources, including fresh water, impacts on
access to natural resources for generation.
• Drilling programme requires access to significant
• Water storage requirements change.
• Increased hydro inflows create opportunities to
increase generation output, but may also increase
flood risk and require spilling at hydro.
volumes of water.
• Consents required for new developments.
• Potential for increased power outages due to
transmission failure caused by storms.
• Increased flood risk around rivers and lakes
impacts on generation operations.
Access to natural
resources
• Changes to hydro inflows impact on our
renewable generation.
• Consent renewal required for Wairākei in 2026.
• Changes in regulation may impact on access to
water, consent conditions and/or costs.
• Increased potential for erosion issues.
• Disruption to physical works during storms.
• Stormwater systems require redesign and/
or replacement to meet changing capacity
requirements.
CONTENTS
FY22 SUMMARY
Intensity of storms
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
84
Contact INTEGRATED REPORT 2022Additional disclosures Habitat protection and restoration work – area
Description of habitat
restoration and location
Major species conserved or
protected at site
Size of area restored
in hectares
Partnerships
Area status as of
30 June 2022
Monitoring and reporting
frequency
Torepatutahi Wetland
restoration project
Willow wetland restored to
natives. Three at-risk taxa including
swamp nettle, fernbird and spotless
crate
36.9 hectares
Working in collaboration
with Ngāti Tahu – Ngāti
Whaoa Runanga,
Department of Conservation
(DoC), Fish & Game,
landowners as part of our
Consent requirements
Systematic removal of pest
plants and pest animals,
maintenance, and annual
planting programme
We undertake biannual
monitoring of transects to
track restoration progress*
Wairākei station entrance
beautification
Karapiti pine poisoning
Wasteland cleared, replanted
in natives and fruit trees for
community garden
Poisoning wilding pines in
restoration areas
2.5 hectares
Greening Taupō
14.5 hectares
No
Planting complete, ongoing
maintenance
Ongoing maintenance of
pest plants and animals
Wairākei Stream wilding
pine poisoning
Poisoning wilding pines and
trapping pest animals
6.2 hectares
No
Poisoning complete,
ongoing maintenance
Wai-ora Hill (Alum Lakes)
geothermal area pest plant
and animal control
Oruanui geothermal area
retirement
Poisoning wilding pines and
pampas on hot ground and
peripheral areas. At-risk geothermal
ferns and vegetation within project
area
Protection of geothermal
vegetation site from pastoral
agriculture and wilding pine
control
67.5 hectares
Waikato Regional Council,
Land Information NZ
and Ministry for Primary
Industries
Ongoing maintenance of
pest plants and animals
3.3 hectares
No
Ongoing pest plant
maintenance
Karapiti mānuka and native
planting
Planting mānuka in area where
pines were harvested
13.5 hectares
No
Ongoing maintenance and
pest control
Rakaunui and Otumuheke
Block riparian management
Planting stormwater drain and
stream flowing from Taupō native
nursery
1.8 hectares
No
Planting complete, ongoing
maintenance
Waipuwerawera stream
restoration project
Restoring five distinct areas of
stream by removing pest plants
and planting natives. Including
geothermal vegetation site
5.7 hectares
Tūwharetoa Māori Trust
Board, Taupō District Council
(TDC), Pāmu Farms and
Department of Conservation
Systematic removal of pest
plants and pest animals,
maintenance and annual
planting programme
Te Rau o Te Huia stream
restoration project
Ecological restoration of the stream
environment and sites of cultural
importance
20.5 hectares
Ngāti Te Rangiita Ki Oruanui Systematic removal of pest
plants and pest animals,
maintenance and annual
planting programme
Never formally; informally
when monitoring the
maintenance required
Never formally; informally
when monitoring the
maintenance required
Never formally; informally
when monitoring the
maintenance required
Monitoring report
completed FY22 to track
progress and refresh
management since project
began in 2019
Never formally; informally
when monitoring the
maintenance required
Never formally; informally
when monitoring the
maintenance required
Never formally; informally
when monitoring the
maintenance required
Never formally; informally
when monitoring the
maintenance required
Never formally; informally
with working partners
when monitoring the
maintenance required and
planning for future years'
works
* Independent assurance has been undertaken for the Torepatutahi Wetland restoration work. Other restoration and protection work has not been assured.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
85
Contact INTEGRATED REPORT 2022Additional disclosures Description of habitat
restoration and location
Major species conserved
or protected at site
Size of area restored
in hectares
Partnerships
Area status as of
30 June 2022
Monitoring and reporting
frequency
Huka/Quarry Block
enhancement planting
Removal of weeds and planting
natives in geothermal area and
within stormwater controls
1.3 hectares
No
Wairākei Drive – Karapiti and
Pony Club
Beautification/aesthetic planting
along Wairakei Drive
2.6 hectares
No
Retirement of land from pastoral
agriculture and enhancement of
wetland/gully environment
4.2 hectares
No
Retirement of land from pastoral
agriculture and enhance screening/
blending of flexible elements into
landscape
2.2 hectares
No
Ongoing maintenance and
pest control
Never formally; informally
when monitoring the
maintenance required
Annual Greening Taupō
planting, aligned with
community desires
Never formally; informally
when monitoring the
maintenance required
Planting complete
and maintenance will
commence for next two
years
Planting complete
and maintenance will
commence for next two
years
Consent requirement
which will require Council
inspection and assessment
Consent requirement
which will require Council
inspection and assessment
Removal of exotic tree species,
eco-sourced planting and traps
0.5 hectares
Hāwea Community
Association (HCA). Wānaka
Backyard trapping
Ongoing to enhance natural
indigenous biodiversity on
lakefront
Monitored by HCA, reviewed
within HFLMP, progression
and work plans monitored
through our Biodiversity
Management Plan
Tauhara Power Station
Development (fixed
elements – retired gully,
screening and stormwater
pond)
Tauhara Power Station
Development (flexible
elements well-pads and
pipelines/broadscale
landscaping)
Gladstone Gap, Hāwea
Not an offset site, but
required through our Hāwea
Foreshore and Landscape
Management Plan (HFLMP).
Area of mixed exotic and
native plantings, weed
species
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
86
Contact INTEGRATED REPORT 2022Additional disclosures
Habitat protection and restoration work – biodiversity measurables
Description of habitat
restoration and location
Major species conserved
or protected at site
Removal of exotic tree
species, eco-sourced
planting and traps
Inanga, eels, lamprey and
giant kōkopu
Gladstone Gap, Hāwea
Not an offset site, but required
through our HFLMP.
Area of mixed exotic and native
plantings, weed species
As part of Native Fish
programme, restoration
continued at multiple locations
in lower Clutha Mata-au in
2021/22. Ongoing riparian
planting, maintenance, fencing
and weed control takes place
each year
Activities
• Removal of exotic pine trees in June 2022
• 145 trees planted
• Tracking tunnels installed
Partnerships
HCA. Wānaka
Backyard
trapping
Area status as of
30 June 2022
Monitoring and
reporting frequency
Ongoing to enhance
natural indigenous
biodiversity on
lakefront
Monitored by HCA, reviewed
within HFLMP, progression
and work plans monitored
through our Biodiversity
Management Plan
Annually as part of our resource
consent requirements. DoC
carry out monitoring and
annually provide reports.
Progression and work plans
monitored through our
Biodiversity Management Plan
All sites are ongoing.
Where plantings are
complete this will be
followed by further
maintenance/weed
control. Ambition is
to annually increase
the pockets of native
planting to allow
a broader scope of
habitat restoration.
Monitoring of aquatic
habitat will also occur
in time
DoC
Murray Riverside Property:
• 414 plants planted
Morrison Property (Matai Pond):
• 295 plants planted
• 85 metres of fencing installed along
waterway
Glaister Paretai:
• 675 plants planted
• 24 hours dedicated to weed control and
plant release of previous plantings
Alister Lister Property (Frasers Stream):
• 1,221 plants planted
• 48 hours dedicated to weed control and
plant release of previous plantings
Tweed Property (Waitahuna River Tributary):
• 428 plants planted
• 180 metres of fencing installed along
waterway
McRae Property (Bobs Creek):
• 6 hours dedicated to weed control and
plant release of previous plantings
• Glyceria weed control at six sites.
Restoration at multiple
locations as part of Contact's
Sports Fish Management
programme
Large variety of fish species,
specifically aiming to
improve habitat for sports
fish species such as salmon
and trout
Manuka Island Site:
• 320 plants
• Willow control-maintenance of existing
plants
Fish & Game
All sites are ongoing.
Where plantings are
complete this will be
followed by further
maintenance/weed
control
Annually as part of our resource
consent requirements.
Progression and work plans
monitored through our
Biodiversity Management Plan
Native plantings
• 343 traps in total across all new native
No
Ongoing pest control Never formally; informally when
Terrestrial pest control at all
native planting sites
plantings
• 575 plants
monitoring the maintenance
required
Taranaki
Regional
Council
Annual planting
programme – ongoing
maintenance
Monitored by Taranaki Regional
Council as part of the Riparian
Management Plan
Ex Keegan Stratford
Farmland to natives in
riparian margin
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
87
Contact INTEGRATED REPORT 2022Additional disclosures
Workforce by contract type, gender, and region – Contact
FY22
Permanent
Fixed term
Casual
Total
Part time
Full time
Non-guaranteed
Total
FY21
Permanent
Fixed term
Casual
Total*
Full time
Part time
Total
headcount
Women
1,023
53
6
1,082
132
944
6
1,082
470
30
2
502
99
401
2
502
Total
headcount
Women
876
40
7
923
806
110
7
923
395
21
2
418
329
87
2
418
Gender
Region
Men
538
23
4
565
33
528
4
565
Other
Undisclosed
North Island
South Island
Undisclosed
0
0
0
0
0
0
0
0
15
0
0
15
0
15
0
15
813
46
5
864
82
777
5
864
206
7
1
214
50
163
1
214
4
0
0
4
0
4
0
4
Gender
Region
Men
480
19
5
504
476
23
5
504
Other
Undisclosed
North Island
South Island
Undisclosed
0
0
0
0
0
0
0
0
1
0
0
1
1
0
0
1
706
28
6
740
664
70
6
740
170
12
1
183
142
40
1
183
0
0
0
0
0
0
0
0
CONTENTS
Non-guaranteed
FY22 SUMMARY
Total*
WHO WE ARE
* FY21 total re-stated due to exclude Simply Energy employees.
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
88
Contact INTEGRATED REPORT 2022Additional disclosures
Workforce by business unit, gender, and region – Contact, Simply Energy and Western Energy
Total
headcount
10
86
465
34
351
94
42
1,082
64
33
1,179
Total
headcount
9
73
507
26
308
923
49
29
1,001
Gender
Region
Women
Men
Other
Undisclosed
North Island
South Island
Undisclosed
2
54
329
12
65
28
12
502
30
6
538
8
32
127
22
285
63
28
565
33
27
625
0
0
0
0
0
0
0
0
0
0
0
0
0
9
0
1
3
2
15
1
0
16
10
83
321
34
288
88
40
864
53
32
949
0
3
143
0
63
3
2
241
10
0
224
0
0
1
0
0
3
0
4
1
1
6
Gender
Region
Women
Men
Other
Undisclosed
North Island
South Island
Undisclosed
3
47
309
8
51
418
24
7
449
6
26
197
18
257
504
25
22
551
0
0
0
0
0
0
0
0
0
0
0
1
0
0
1
0
0
1
9
71
383
26
251
740
40
29
809
0
2
124
0
57
183
9
0
192
0
0
0
0
0
0
0
0
0
FY22
Officers
Corporate
Retail
Development
Generation and Trading
ICT
Digital
Total
Simply Energy
Western Energy
Total
FY21
Officers
Corporate
Customer
CONTENTS
Development
FY22 SUMMARY
Generation and Trading
WHO WE ARE
Total
Simply Energy
Western Energy
Total
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
89
Note: Customer separated out to become Retail, ICT and Digital in FY22.
Contact INTEGRATED REPORT 2022Additional disclosures
Board diversity – Contact
Women
Men
Total
Under 30
30–50
Over 50
Total
European/
Pākehā
Māori
Pasifika
Total
Board of directors FY22
Board of directors FY21
4
4
3
3
7
7
0
0
3
4
4
3
7
7
6
6
1
1
1
1
7
7
Employee diversity by business unit – Contact Simply Energy and Western Energy
FY22
Women
Men
Undis-
closed
Under 30
30–50
Over 50
Undis-
closed
European/
Pākehā
Māori
Pasifika
Asian
Other
AMELA
Officers
Corporate
Retail
Development
Generation
and Trading
ICT
Digital
Total
Simply Energy
Western Energy
Total
FY21
Officers
Corporate
Customer
Development
Generation
and Trading
Total
Simply Energy
Western Energy
Total
2
54
329
12
65
28
12
8
32
127
22
285
63
28
502
565
30
6
33
27
538
625
0
0
9
0
1
3
2
15
1
0
16
0
13
153
3
36
13
6
5
55
206
18
154
55
30
5
17
102
13
158
26
6
224
523
327
6
7
42
23
9
3
0
1
4
0
3
0
0
8
7
0
4
34
189
18
143
33
17
0
6
69
0
22
8
1
0
3
21
0
3
1
0
0
8
42
2
25
19
11
4
24
107
7
120
18
9
1
0
3
1
5
1
3
438
106
28
107
289
14
256
237
588
339
15
438
106
28
107
289
14
256
Women
Men
Undis-
closed
Under 30
30–50
Over 50
Undis-
closed
European/
Pākehā
Māori
Pasifika
Asian
Other
AMELA
3
47
309
8
51
418
24
7
449
6
26
197
18
257
504
25
22
551
0
0
1
0
0
1
0
0
1
0
9
138
2
31
180
4
8
192
3
48
248
10
122
431
32
20
483
6
15
117
14
152
304
7
1
0
1
4
0
3
8
6
0
4
26
196
12
121
359
0
5
57
0
18
80
0
0
15
0
2
17
0
7
53
1
17
78
3
19
124
7
108
261
1
0
6
1
4
12
240
312
14
359
80
17
78
261
12
240
Note: Individuals can choose to identify multiple ethnicities. Simply Energy and Western Energy do not track ethnicity data. Customer separated out to become Retail, ICT and Digital in FY22.
Undis-
closed
1
24
120
6
71
26
8
Undis-
closed
1
23
140
5
71
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
90
Contact INTEGRATED REPORT 2022Additional disclosures
Employee diversity by employee category – Contact
FY22
Women
Men
Undis-
closed
Under 30
30–50
Over 50
Undis-
closed
European/
Pākehā
Māori
Pasifika
Asian
Other
AMELA
Key managerial
personnel
Other Execs/
GMs
Senior
Management
Other
Managers
Non-Managers
Total
STEM1
Sales
FY21
Key managerial
personnel
Other Execs/
GMs2
Senior
Management
Other
Managers
2
2
11
48
439
502
112
329
8
4
23
84
446
565
380
127
0
0
0
0
15
15
6
9
0
0
0
4
220
224
56
153
5
5
21
69
423
523
251
206
5
1
13
58
250
327
188
102
0
0
0
1
7
8
3
4
4
1
16
60
357
438
202
189
0
0
2
8
96
106
28
69
0
0
0
1
27
28
4
21
0
0
1
8
98
107
56
42
4
2
15
35
233
289
145
107
1
0
0
2
11
14
10
3
Women
Men
Undis-
closed
Under 30
30–50
Over 50
Undis-
closed
European/
Pākehā
Māori
Pasifika
Asian
Other
AMELA
3
3
13
34
5
5
18
73
0
0
0
0
1
1
0
0
0
2
3
7
21
49
5
1
10
55
178
180
351
431
233
304
0
0
0
1
7
8
3
1
16
49
290
359
0
0
1
7
72
80
0
0
0
1
16
17
0
0
1
6
71
78
3
3
14
33
208
261
1
0
0
0
11
12
Non-Managers
Total
365
418
403
504
1 Science, technology, engineering and mathematics.
2 Numbers re-stated due to job reclassifications.
Undis-
closed
1
3
6
30
216
256
107
120
Undis-
closed
1
4
5
23
207
240
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
91
Contact INTEGRATED REPORT 2022Additional disclosures
Customer privacy
Lost-Time Injury Frequency Rate (LTIFR) – Employees & Contractors
FY22
FY21
FY22
FY21
FY20
FY19
Number of complaints received from outside parties
and substantiated by the organisation
Number of complaints received from regulatory bodies
Total number of identified leaks, thefts, or losses of
customer data
0
0
1
0
76*
28*
Employees (n/million
hours worked)
Contractors (n/million
hours worked)
Safety data
0
2.5
0
8.1
0.5
4.6
3.9
2.1
* We started recording the number of privacy breaches from 1 December 2020. While the number
appears high, most of the privacy breaches were considered minor in nature (for example, affected
one or two customers causing little or no harm) and did not require being reported to the Office
of the Privacy Commissioner.
We've identified that the increased number of breaches is a result of
increased reporting, rather than an increased number of breaches.
The Privacy Act 2020 came into force on 1 December 2020 and introduced,
among other things, mandatory privacy breach reporting for notifiable
privacy breaches. A notifiable privacy breach is a privacy breach where
serious harm has been caused or is likely. One breach met this threshold.
We do not expect any further action to be taken in respect of that breach.
Hiring
Total number of new
employee hires
Percentage of open
positions filled by internal
candidates (internal hires)
Employee turnover rate
Total employee turnover
rate
Voluntary employee
turnover rate
FY22
363
FY21
172
FY20
198
FY19
186
41.0%
45.4%
48.6%
55.8%
FY22
19.2%
FY21
17.4%
FY20
16.9%
FY19
19.0%
13.4%
11.8%
12.5%
12.1%
Employees
Non-employees
Number
Rate
Number Rate
Fatalities
High-consequence work-related injuries
Recordable work-related injuries
0
0
0
0
0
0
0
0
5
Number of hours worked
2,028,778
N/A
911,130
0
0
5.49
N/A
The main types of work-related injuries Open wound not involving traumatic
amputation (i.e cut finger)
Work-related hazards that pose a risk of
high-consequence injury
Energy sources, hazardous substances, working
at height, working in confined spaces, lifting
heavy loads, working with mobile plant, working
around water, excavations, fitness for work,
staying safe while driving, scope of work change.
The hazards listed above have been determined through identification
of critical tasks and based on consequences of injuries that happen in
these areas.
Our hazard ID processes cover actions taken to eliminate these hazards
and minimize risks.
Rates have been calculated based on 1,000,000 hours worked.
Monitored contractors are excluded because the work is contracted and
takes place off sites.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
92
Contact INTEGRATED REPORT 2022Additional disclosures
Green Borrowing Programme
In line with our commitment to a low-carbon economy, Contact has a Green
Borrowing Programme to finance Contact’s past and future renewable energy
generation investments. This is a progressive approach to financing and
provides investors and lenders with an opportunity to access a broad range
of accredited green debt instruments where proceeds have been applied
to eligible green assets. The Green Borrowing Programme is described in
Contact’s Green Bond Framework (Framework), which aligns with the Green
Bond Principles and is certified by the Climate Bonds Initiative (CBI) under
Climate Bond Standard V3.0 with assurance from KPMG.
The Framework, CBI certification and KPMG’s annual assurance statement
are available on our website. The Framework articulates which of Contact’s
debt instruments and assets qualify as green, and provides for a comprehensive
compliance and disclosure regime to ensure the Climate Bonds Standard V3.0
is always met, in turn ensuring that the existing CBI certification remains in
place. A key compliance metric is the Green Ratio whereby the total green asset
value must be at least equal to total green debt instruments (i.e. a ratio of 1.0
minimum). This indicator is reported on a half-yearly basis.
The following table sets out the total green asset value and total green debt
instruments for the current reporting period, and confirms that the Green
Ratio is met at 1.34. Contact confirms to the best of its knowledge that its
Green Borrowing Programme continues to remain in compliance with the
CBI certification in place, including the requirements of the Climate Bonds
Standard V3.0.
Geothermal assets data
Book value
$m
Generation
(GWh)
Emissions
(tCO2e)
Emissions intensity
(gCO2e/KWh)
Compliance with CBI
standards (<100 gCO2e/KWh)
Poihipi
Tauhara
Te Mihi
Te Huka
Wairākei
Tenon and Nature’s Flame1
Ohaaki2
Geothermal portfolio total/average
Eligible Green Asset total/average
CONTENTS
Total Green Debt Instruments
Green Asset Ratio
140
497
481
114
700
8
101
2,042
1,941
1,446
1.34
331
–
1,386
189
1,055
188
322
3,471
3,149
12,565
–
54,784
10,018
18,528
1,622
85,494
183,011
97,517
38
N/A
40
53
18
9
266
53
31
Yes
Yes
Yes
Yes
Yes
Yes
No
1 Includes direct heat sold to Tenon and Nature’s Flame.
2 Ineligible green asset in relation to Contact’s Green Borrowing Programme.
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
93
Contact INTEGRATED REPORT 2022Additional disclosures
Contributions and other spending
Annual total monetary contributions to and spending for political
campaigns, political organisations, lobbyists or lobbying organisations,
trade associations and other tax-exempt groups:
$ NZD
FY22
FY21
FY20
FY19
Lobbying, interest representation or
similar
Local, regional or national political
campaigns/organisations/candidates
Trade associations or tax-exempt groups
Other (e.g. spending related to ballot
measures or referendums)
161,000
167,986 169,540 161,852
–
–
–
–
–
–
–
–
–
–
–
–
Total
161,000 167,986 169,540 161,852
IT Security/Cybersecurity Governance
The Chief Information Officer is responsible for overseeing cybersecurity
within the company.
Supply chain impacts
FY22
FY21
Suppliers assessed for environmental
and social impacts
Suppliers identified as having
significant actual and potential negative
environmental and social impacts
Percentage of suppliers with which
improvements have been agreed upon
as a result of assessment
Percentage of suppliers with which
relationships have been terminated
as a result of assessment
49
0
0%
0%
5
1
0%
0%
Our supplier reviews focused on existing suppliers and identified differing
maturity levels in ESG reporting. In all cases suppliers expressed commitment to
improving ESG reporting and processes for tracking environmental and social
impacts. Our number of suppliers assessed represents 31% of total vendor spend.
Membership of associations or advocacy organisations
Holds a position on the governance body
Electricity Retailers’ Association of New Zealand (ERANZ)
Gas Industry Company
Participates in projects or committees
Aotearoa Circle
Australasian Investor Relations Association (AIRA)
Business New Zealand (Energy Council Major Companies Group, Corporate
Affairs Group, Corporate Taxpayers Group)
Champions for Change
Climate Leaders Coalition
Drive Electric
Electricity Authority Market Development Advisory Group
ENA Joint Implementation Working Group
ENA Technical Implementation Working Group
ERANZ Communications Committee
ERANZ Data Working Group
ERANZ Policy Committee
ERANZ Retailer Revenue Assurance Advisory Forum
ERANZ Retailers’ Operational Forum
ERANZ Vulnerable Customer & Medically Dependent Customer (VCMDC)
Working Group
Generator Forum
Hugo Group
International Geothermal Association
Liquefied Petroleum Gas Association
NZ Geothermal Association
NZ Hydrogen Association
NZ Initiative
Sustainable Business Council
Wellington Chamber of Commerce
Women in Geothermal
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
94
Contact INTEGRATED REPORT 2022Additional disclosures
TCFD index
Disclosure
Page
number
Describe the board’s oversight of climate-related risks and opportunities.
66–67
Describe management’s role in assessing and managing climate-related
risks and opportunities.
Describe the climate-related risks and opportunities the organisation has
identified over the short, medium and long term.
Describe the impact of climate-related risks and opportunities on the
organisation's businesses, strategy and financial planning.
Describe the resilience of the organisation's strategy, taking into
consideration different climate-related scenarios, including a 2 degree or
lower scenario.
Describe the organisation's processes for identifying and assessing
climate-related risks.
Describe how processes for identifying, assessing and managing
climate-related risks are integrated into the organisation's overall risk
management.
Disclose the metrics used by the organisation to assess climate-related
risks and opportunities in line with its strategy and risk management
process.
66–67
83–84
46
46
46
25–26
25–27, 43
Disclose Scope 1, 2 and if appropriate 3 greenhouse gas (GHG) emissions,
and the related risks.
45, 81–82
Describe the targets used by the organisation to manage climate-related
risks and opportunities and performance against targets.
27, 43–45
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
95
Contact INTEGRATED REPORT 2022Additional disclosures GRI index
Contact has reported in accordance with the GRI Standards for the period
1 July 2021 to 30 June 2022.
GRI 1 used
GRI 1: Foundation 2021
Applicable
GRI Sector
Standard(s)
There is no current applicable sector standard.
GRI Standard/
Other source Disclosure
GRI 2: General Disclosures 2021
Page
Explanation
Organisational details
Entities included in
the organisation’s
sustainability reporting
103,
131
81
Reporting period,
frequency and contact
point
2, 81,
103
Restatements of
information
50, 88,
115,
126
External assurance
67, 129
Activities, value chain
and other business
relationships
14–24
Employees
88
Workers who are not
employees
Omitted Information unavailable: We do
not have any comprehensive
tracking of non-employees (i.e
contractors) however are aiming
to introduce better tracking in the
near future.
Governance structure
and composition
64–67 Further detail can be found on
pages 4–5 in our Corporate
Governance Statement.
Nomination and
selection of the highest
governance body
–
Information is on page 3 of
our Corporate Governance
Statement.
2–1
2–2
2–3
2–4
2–5
2–6
2–7
2–8
2–9
2–10
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
96
GRI Standard/
Other source Disclosure
Page
Explanation
2–11
2–12
2–13
2–14
Chair of the highest
governance body
64
Further detail can be found
in our Corporate Governance
Statement.
Role of the highest
governance body
in overseeing the
management of
impacts
Delegation of
responsibility for
managing impacts
64,
66–67
66–67
Role of the highest
governance body in
sustainability reporting
66–67
2–15
Conflicts of interest
76–78 Further detail can be found
2–16
2–17
2–18
2–19
2–20
2–21
2–22
in our Corporate Governance
Statement, Conflict of Interest
Policy, and Code of Conduct.
Communication of
critical concerns
67
Collective knowledge
of the highest
governance body
Evaluation of the
performance of the
highest governance
body
65–66 Further detail can be found on
pages 2–6 of our Corporate
Governance Statement.
64
Further detail can be found
on page 3 of our Corporate
Governance Statement.
Remuneration policies
69–73
Process to determine
remuneration
70–71 Further detail can be found
on page 7 of our Corporate
Governance Statement.
Annual total
compensation ratio
74
2–21 b has been omitted as not
applicable: Mike Fuge joined
Contact part-way through
FY20, therefore his STI / equity
component is not for a full year in
FY21.
Statement on
sustainable
development strategy
7–9
Contact INTEGRATED REPORT 2022Additional disclosures
GRI Standard/
Other source Disclosure
Page
Explanation
GRI Standard/
Other source Disclosure
Page
Explanation
2–23
Policy commitments
66
Further detail can be found in our
Code of Conduct, and within
our policies.
GRI 303: Water and Effluents 2018
303–1
Interactions with water
as a shared resource
2–24
2–25
2–26
2–27
2–28
2–29
2–30
Embedding policy
commitments
Processes to remediate
negative impacts
–
Information can be found in our
Code of Conduct, and within each
of our policies.
Omitted Information incomplete: We have
engaged with local communities
in the past to remediate negative
impacts, such as our remediation
efforts following the 2019 Karapiti
incident, and have a Stakeholder
Engagement Policy detailing our
engagement with stakeholders.
Mechanisms for
seeking advice and
raising concerns
Compliance with laws
and regulations
Membership
associations
Approach to
stakeholder
engagement
Collective bargaining
agreements
66,
131
67
94
47
–
Also indicator for material topics
natural resource protection and
environmental pollution.
303–2
Management of water
discharge-related
impacts
Omitted Information incomplete: Contact
is in a growth phase with the
construction of a new Geothermal
Power Station and reconsenting
of an existing one. This means
changes to our impacts on
waterways and interactions with
communities, Tangata Whenua and
other users. Conditions of consents,
engagement and agreements that
are ongoing identify that impacts
on waterways are all proposed to
be improved in line with our water
statement position. This disclosure
will be included going forward.
Omitted Confidentiality constraints:
All discharge impacts to
waterways are managed as part
of our licence to operate within
consent conditions as well as
energy supply agreements held
with third parties. Disclosure will
be reviewed for next year.
9.3% of total Contact employees
were covered by collective
bargaining agreements as at
30 June 2022. Contractor data
not collected.
GRI 3: Material Topics 2021
3–1
3–2
Process to determine
material topics
18–19
List of material topics
20–21
Material Topics
Water and effluents
GRI 3: Material Topics 2021
3–3
Management of
material topic
50–51 Indicators for material topics
freshwater system health, biodiversity
protection and restoration,
natural resource protection
and environmental pollution.
303–3
303–4
303–5
Biodiversity
Water withdrawal
Water discharge
Water consumption
50
50
50
GRI 3: Material Topics 2021
3–3
Management of
material topic
GRI 304: Biodiversity 2016
51–52 Indicators for material topics
biodiversity protection and
restoration, natural resource
protection and environmental
pollution.
304–1
Operational sites
owned, leased,
managed in, or
adjacent to, protected
areas and areas of
high biodiversity value
outside protected
areas
Omitted Information incomplete:
Biodiversity impacts and attention
of focus has been at operational
sites that have significant impacts
as well areas as considered to
have intrinsic biodiversity value.
Therefore, not every operational
site has been included in reporting.
Will look to disclose next year.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
97
Contact INTEGRATED REPORT 2022Additional disclosures
GRI Standard/
Other source Disclosure
Page
Explanation
GRI Standard/
Other source Disclosure
Page
Explanation
304–2
304–3
304–4
Significant impacts of
activities, products and
services on biodiversity
51
Habitats protected or
restored
85–87
IUCN Red List
species and national
conservation list
species with habitats
in areas affected by
operations
Omitted Information unavailable: An
assessment was carried out to
identify any areas where Contact’s
operations have an impact on
IUCN Protected Areas. Our thermal,
geothermal and hydro activities do
not operate within any IUCN
Protected Areas. We have
acknowledged multiple IUCN
Protected Areas fall near our
key operational sites. We have
assessed these areas in terms of
their proximity to our operational
sites and can confirm we have
no influence on the biodiversity
in these areas. Contact follows
Government Policy and
implements work standards
to ensure best environmental
practice. There are no impacts
identified from our activities at this
time, however we will review the
Red List species in next year.
Emissions
GRI 3: Material Topics 2021
Management of
material topic
30, 37,
44–45
Indicators for material topics
generation emissions,
decarbonisation and electrification,
natural resource protection and
environmental pollution.
CONTENTS
3–3
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
98
GRI 305: Emissions 2016
305–1
305–2
305–3
305–4
Direct (Scope 1) GHG
emissions
Energy indirect (Scope 2)
GHG emissions
Energy indirect (Scope 3)
GHG emissions
GHG emissions
intensity
81
81
82
81
305–5
305–6
305–7
Reduction of GHG
emissions
45
Emissions of ozone-
depleting substances
(ODS)
Omitted Not applicable: New Zealand
legislation prevents emission
of ODS.
Nitrogen oxides (NOx),
sulfur oxides (SOx), and
other significant air
emissions
Omitted Information unavailable: NOx,
SOx and other emission data for
FY22 is currently unavailable, and
is expected to be calculated at a
later date.
Reliable and renewable energy
GRI 3: Material Topics 2021
3–3
Management of
material topic
33–35 Indicator for material topics
renewable energy supply, reliable
energy supply.
Own measure
Percentage of
renewable generation
14
Demand flexibility
GRI 3: Material Topics 2021
3–3
Management of
material topic
29–30,
40
Indicator for material topic
demand flexibility.
G4 Electric Utilities Aspect Disclosures
Describe demand
side management
programs
29, 40
Supplier environmental assessment
GRI 3: Material Topics 2021
3–3
Management of
material topic
47
Indicator for material topic
sustainable procurement.
GRI 308: Supplier Environmental Assessment 2016
308–1
308–2
New suppliers that
were screened using
environmental criteria
Omitted Information unavailable: We have
not assessed new suppliers in
FY22, however are aiming to
introduce this in the near future.
Negative environmental
impacts in the supply
chain and actions
taken
94
Contact INTEGRATED REPORT 2022Additional disclosures
GRI Standard/
Other source Disclosure
Page
Explanation
GRI Standard/
Other source Disclosure
Page
Explanation
GRI 414: Supplier Social Assessment 2016
414–1
414–2
New suppliers that
were screened using
social criteria
Omitted Information unavailable: We
have not assessed new suppliers
in FY22, however are aiming to
introduce this in the near future.
Negative social
impacts in the supply
chain and actions
taken
94
Occupational health and safety
GRI 3: Material Topics 2021
3–3
Management of
material topic
57–58 Indicators for material topic
workforce health and wellbeing.
GRI 403: Occupational Health and Safety 2018
403–9
Work-related injuries
Own measure
TISR
92
57
Occupational
health and safety
management system
Hazard identification,
risk assessment, and
incident investigation
Occupational health
services
Worker participation,
consultation, and
communication on
occupational health
and safety
Worker training on
occupational health
and safety
Omitted
Omitted Information unavailable: While
some of the information for the
omitted disclosures is contained
throughout the report and on
our website, we opted not to
meet the disclosure requirements.
This is due to our aim of continuing
disclosures we had reported last
year. We will review our choice of
disclosures in the next financial year.
Omitted
Omitted
Omitted
Promotion of worker
health
Omitted
403–1
403–2
403–3
403–4
403–5
403–6
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
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THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
99
403–7
403–8
Prevention and
mitigation of
occupational health
and safety impacts
directly linked by
business relationships
Workers covered
by an occupational
health and safety
management system
Omitted Information unavailable: While
some of the information for the
omitted disclosures is contained
throughout the report and on
our website, we opted not to
meet the disclosure requirements.
This is due to our aim of continuing
disclosures we had reported last
year. We will review our choice of
disclosures in the next financial year.
Omitted
403–10
Work-related ill health Omitted
Process safety
GRI 3: Material Topics 2021
3–3
Management of
material topic
57–58 Indicator for material topic
infrastructure safety.
Own measure
Process safety data
58
Climate change impact on assets
GRI 3: Material Topics 2021
3–3
Management of
material topic
46,
83–84
Indicator for material topic
climate change impact on assets.
Own measure
Impacts on assets from
physical risks of climate
change
83–84
Diversity and equal opportunity
GRI 3: Material Topics 2021
3–3
Management of
material topic
53–56 Indicators for material topic
diversity and inclusion.
GRI 405: Diversity and Equal Opportunity 2016
405–1
405–2
Diversity of governance
bodies and employees
90–91
Ratio of basic salary
and remuneration of
women to men
Omitted Information unavailable:
The information to breakdown
our employee remuneration
by employee category and area
of operation is not currently
captured. We will review our
process in the next financial year.
We do include information on
pay equity.
Contact INTEGRATED REPORT 2022Additional disclosures
GRI Standard/
Other source Disclosure
Staff engagement
GRI 3: Material Topics 2021
Page
Explanation
GRI Standard/
Other source Disclosure
Energy Hardship
GRI 3: Material Topics 2021
Page
Explanation
3–3
Management of
material topic
53–54 Indicator for material topic team
3–3
culture.
Management of
material topic
38–39 Indicator for material topic energy
hardship and affordability.
Own measure
Staff engagement
53
44, 47 Indicator for material topics
3–3
Management of
material topic
38–39 Indicator for material topic
customer trust.
Own measure
Reduction of customer
debt expressed as a
percentage
40
Customer experience
GRI 3: Material Topics 2021
Own measure
Customer satisfaction
(Net Promoter Score)
39
Local communities
GRI 3: Material Topics 2021
3–3
Management of
material topic
GRI 413: Local Communities 2016
413–1
413–2
Operations with
local community
engagement,
impact assessments,
and development
programs
Operations with
significant actual and
potential negative
impacts on local
communities
Customer privacy
GRI 3: Material Topics 2021
tangata whenua partnerships
and community wellbeing.
47–52
Omitted Information incomplete: While
we discuss our impacts on
biodiversity, habitats, and the
environment throughout the
report, we do not discuss this in
context of the local community
in the detail that the disclosure
requires. We will review local
community engagement plans.
3–3
Management of
material topic
62
Indicator for material topic privacy
and cybersecurity.
GRI 418: Customer Privacy 2016
418–1
92
Substantiated
complaints concerning
breaches of customer
privacy and losses of
customer data
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
100
Contact INTEGRATED REPORT 2022Governance matters
Financial
statements
Contact
Contact
INTEGRATED
INTEGRATED
REPORT
REPORT
2022
2022
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CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
101
101
Financial statements
Contents
About these financial statements
A. Our performance
E. Other disclosures
Statement of comprehensive income
Statement of cash flows
A1. Segments
A2. Earnings
Statement of financial position
A3. Free cash flow
Statement of changes in equity
Notes to the financial statements
B. Our funding
E1. Tax
E2. Operating expenses
E3. Inventory
E4. Trade and other receivables
E5. Trade and other payables
B1. Capital structure
E6. Provisions
B2. Share capital
B3. Distributions
B4. Borrowings
E7. Profit to operating cash flows
E8. Hedging activities
E9. Financial instruments at fair value
B5. Net interest expense
E10. Financial instruments at amortised cost
C. Our assets
E12. Related parties
C1. Property, plant and equipment and
E13. New accounting standards
intangible assets
C2. Goodwill and asset impairment testing
E14. Contingencies
E11. Share-based compensation
D. Our financial risks
D1. Market risk
D2. Liquidity risk
D3. Credit risk
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
102
Contact INTEGRATED REPORT 2022Financial statements for the year ended 30 June 2022
About these
financial statements
For the year ended 30 June 2022
These financial statements are for Contact,
a group made up of Contact Energy Limited,
the entities over which it has control and its
associates.
Contact Energy Limited is registered in New Zealand under the Companies
Act 1993. It is listed on the New Zealand Stock Exchange (NZX) and the
Australian Securities Exchange (ASX) and has bonds listed on the NZX debt
market. Contact is an FMC reporting entity under the Financial Markets
Conduct Act 2013.
Contact’s financial statements are prepared:
• in accordance with New Zealand generally accepted accounting practice
(GAAP) and comply with New Zealand equivalents to International Financial
Reporting Standards (IFRS) and IFRS as appropriate for profit-oriented
entities
• in millions of New Zealand dollars (NZD) unless otherwise noted
• on a historical cost basis except for financial instruments held at fair value
• using the same accounting policies for all reporting periods presented
• with certain comparative amounts reclassified to conform to the current
year’s presentation.
Estimates and judgements are made in applying Contact’s accounting
policies. Areas that involve a higher level of estimation or judgement are:
• useful lives of property, plant and equipment and intangible assets (note C1)
• impairment testing of cash-generating units and future generation
development capital work in progress (note C2)
• fair value measurement of financial instruments (notes D1 and E9)
• provision for future restoration and rehabilitation obligations (note E6).
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
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ENABLERS
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MATTERS
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DISCLOSURES
FINANCIAL
STATEMENTS
103
The financial statements were authorised on behalf of the Contact Energy
Limited Board of Directors on 12 August 2022.
Robert McDonald
Chair
Sandra Dodds
Chair, Audit and Risk Committee
Contact INTEGRATED REPORT 2022Financial statements for the year ended 30 June 2022
Statement of
comprehensive income
For the year ended 30 June 2022
Statement of
cash flows
For the year ended 30 June 2022
$m
Revenue
Operating expenses
Net interest expense
Depreciation and amortisation
Change in fair value of financial instruments
Profit before tax
Tax expense
Profit
Note
A2
A2
B5
C1
D1
E1
Items that may be reclassified to profit/(loss):
Change in hedge reserves (net of tax)
E8
Comprehensive income
Profit per share (cents) – basic and diluted
2022
2,387
2021
$m
Note
2,573
Receipts from customers
(1,850)
(2,020)
Payments to suppliers and employees
2022
2,397
2021
2,524
(1,880)
(1,970)
(36)
(262)
(50)
(249)
Interest paid
Tax paid
14 7
Operating cash flows
E7
253
(71)
182
(31)
151
23.4
261
(74)
187
(2)
185
25.3
Purchase and construction of assets
Capitalised interest
Investment in associates
Proceeds from sale of assets
Acquisition of subsidiaries
Investing cash flows
Dividends paid
Proceeds from borrowings
Repayment of borrowings
Financing costs
B3
(28)
(89)
400
(347)
(19)
(11)
1
(43)
(79)
432
(129)
(8)
(8)
–
(5)
(32)
(381)
(242)
536
(291)
(4)
(177)
(274)
356
(623)
–
Net proceeds from share issue
–
392
Financing cash flows
Net cash flow
Add: cash at the beginning of the year
Cash at the end of the year
B4
(1)
18
150
168
(149)
106
44
150
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
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THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
104
Contact INTEGRATED REPORT 2022Financial statements for the year ended 30 June 2022
Statement of
financial position
At 30 June 2022
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
105
$m
Cash and cash equivalents
Trade and other receivables
Inventories
Intangible assets
Derivative financial instruments
Assets held for sale
Total current assets
Property, plant and equipment
Intangible assets
Goodwill
Investments in associates
Derivative financial instruments
Total non-current assets
Total assets
Trade and other payables
Tax payable
Borrowings
Derivative financial instruments
Provisions
Total current liabilities
Borrowings
Derivative financial instruments
Provisions
Deferred tax
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
Share capital
Retained earnings
Hedge reserves
Share-based compensation reserve
Shareholders’ equity
Note
B4
E4
E3
C1
D1
C1
C1
C2
E12
D1
E5
B4
D1
E6
B4
D1
E6
E1
B2
E8
E11
2022
168
227
58
27
23
5
508
4,095
200
214
21
128
4,658
5,166
261
36
287
98
15
697
812
128
58
616
15
1,629
2,326
2,840
1,955
958
(82)
8
2021
150
255
69
24
56
–
554
3,961
221
214
10
70
4,476
5,030
305
39
163
92
23
622
693
84
51
637
16
1,481
2,103
2,927
1,922
1,048
(51)
8
2,840
2,927
Contact INTEGRATED REPORT 2022Financial statements for the year ended 30 June 2022
Statement of
changes in equity
For the year ended 30 June 2022
$m
Balance at 1 July 2020
Profit
Change in hedge reserves (net of tax)
Change in share capital
Dividends paid
Balance at 30 June 2021
Profit
Change in hedge reserves (net of tax)
Change in share capital
Dividends paid
Balance at 30 June 2022
Note
Share
capital
Retained
earnings
Other
reserves
Shareholders’
equity
1,528
1,134
(41)
2,621
E8
B2
B3
E8
B2
B3
–
–
187
–
394
–
–
1,922
–
–
33
–
1,955
(274)
1,048
182
–
–
(272)
958
–
(2)
–
–
(43)
–
(31)
–
–
187
(2)
394
(274)
2,927
182
(31)
33
(272)
(74)
2,840
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
106
Contact INTEGRATED REPORT 2022Financial statements for the year ended 30 June 2022
Notes to the financial statements
A. Our performance
A1. Segments
Contact reports activities under the Wholesale segment and the Retail
(previously named ‘Customer’) segment.
The Wholesale segment includes revenue from the sale of electricity to the
wholesale electricity market, to Commercial & Industrial (C&I) customers and
to the Retail segment, less the cost to generate and/or purchase the electricity
and costs to serve and distribute electricity to C&I customers.
The results of Simply Energy Limited and Western Energy Services Limited,
following their acquisition in the prior year, have been included within the
Wholesale segment in the relevant line items.
The Retail segment includes revenue from delivering electricity, natural gas,
broadband and other products and services to mass market customers less
the cost of purchasing those products and services, and the cost to serve
customers.
‘Unallocated’ includes corporate functions not directly allocated to the
operating segments.
The Retail segment purchases electricity from the Wholesale segment at a
fixed price in a manner similar to transactions with third parties.
A2. Earnings
The table on the next page provides a breakdown of Contact’s revenue,
expenses and earnings before interest, tax, depreciation, amortisation and
changes in fair value of financial instruments (EBITDAF) by segment, and a
reconciliation from EBITDAF to profit reported under NZ GAAP. EBITDAF is
used to monitor performance and is a non-GAAP profit measure.
$13 million (2021: $12 million) of metering costs, previously included within
‘Other operating expenses’, have been reclassified to ‘Electricity networks,
levies & meter costs’ to better reflect the direct nature of these costs and to
improve comparability with the industry.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
107
The key revenue categories are:
• Electricity and gas
Electricity and gas revenue (including mass market electricity, C&I electricity
and gas) is recognised when energy is supplied for customer consumption.
Mass market electricity includes net revenue for AA Smartfuel rewards.
Revenue is initially recognised net of prompt payment discounts.
• Wholesale electricity, net of hedging
Revenue received from electricity generated and sold through the wholesale
market, the net settlement of electricity hedges sold on the electricity
futures markets and to generators, other retailers and industrial customers.
Revenue is recognised as the energy is delivered.
• Electricity-related services
Revenue from the sale of complementary products and services to the
wholesale market for the provision of instantaneous reserves, frequency
keeping and other ancillary services. Revenue is recognised as the services
are provided.
• Steam and broadband
Revenue from the sale of steam is recognised as the steam is delivered.
Broadband revenue is recognised as the broadband services are provided.
Revenue recognition involves the calculation of unbilled revenue accruals for
mass market, C&I electricity and gas, as well as the recognition of contract
assets (note E4).
Simply Energy Limited revenue for electricity supply and billing services is
included in the ‘C&I electricity – fixed price’, ‘C&I electricity – pass through’ and
‘Wholesale electricity, net of hedging’ revenue lines. Revenue is recognised
when energy is supplied for customer consumption and as billing services
are provided.
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022 $m
Mass market electricity
C&I electricity – fixed price
C&I electricity – pass through
Wholesale electricity, net of hedging
Electricity-related services revenue
Inter-segment electricity sales
Gas
Steam
Geothermal services
Broadband
Other income
Total revenue
Electricity purchases, net of hedging
Electricity purchases – pass through
Electricity-related services cost
Inter-segment electricity purchases
Gas and diesel purchases
Gas storage costs
Carbon emissions costs
Generation transmission & levies
Electricity networks, levies & meter costs – fixed price
Electricity networks, levies & meter costs – pass through
Gas networks, transmission & meter costs
Geothermal service costs
Broadband costs
Other market costs
Other operating expenses
Total operating expenses
EBITDAF
Depreciation and amortisation
Net interest expense
Change in fair value of financial instruments
Tax expense
Profit
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
108
Wholesale
Retail Unallocated Eliminations
Total
Wholesale
Retail Unallocated Eliminations
Total
2022
2021
–
215
34
1,071
8
395
7
33
3
–
6
869
–
–
–
–
–
82
–
–
53
7
1,772
1,011
(793)
(26)
(8)
–
(95)
(24)
(38)
(24)
(60)
(8)
(6)
(2)
–
(25)
(115)
–
–
–
(395)
(33)
–
(6)
–
(407)
–
(40)
–
(45)
–
(68)
(1,224)
(994)
548
17
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(28)
(28)
(28)
(1)
868
–
839
215
249
34
44
1,071
1,285
8
338
–
–
–
–
–
8
–
89
33
3
53
13
2
74
28
3
–
4
–
–
32
6
–
–
–
–
(395)
–
–
–
–
–
(396)
2,387
1,961
951
–
–
–
395
(793)
(26)
(8)
–
(974)
(30)
(7)
–
–
–
–
–
–
–
–
–
–
–
(128)
(126)
(24)
(44)
(24)
(467)
(8)
(46)
(2)
(45)
(25)
(24)
(41)
(28)
(82)
(13)
(7)
(1)
–
–
1
(210)
(101)
396
(1,850)
(1,434)
–
–
–
(338)
(24)
–
(4)
–
(390)
–
(38)
–
(33)
–
(68)
(895)
–
537
527
56
(262)
(36)
14
(71)
182
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(1)
838
–
–
–
–
249
44
1,285
8
(338)
–
–
–
–
–
–
76
28
3
32
10
(339)
2,573
–
–
–
338
–
–
–
–
–
–
–
–
–
–
(974)
(30)
(7)
–
(150)
(24)
(45)
(28)
(472)
(13)
(45)
(1)
(33)
–
(30)
(30)
(30)
1
(198)
339
(2,020)
–
553
(249)
(50)
7
(74)
187
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022
A3. Free cash flow
Free cash flow is a non-GAAP cash measure that shows the amount of cash
Contact has available to distribute to shareholders, reduce debt or reinvest in
growing the business. A reconciliation from EBITDAF to NZ GAAP operating
cash flows and to free cash flow is provided below.
$m
EBITDAF
Tax paid
Note
A2
Change in working capital, net of investing and
financing activities
Non-cash items included in EBITDAF
Net interest paid, excluding capitalised interest
Operating cash flows
E7
Stay-in-business capital expenditure
Operating free cash flow
Proceeds from sale of assets
Free cash flow
Operating free cash flow per share (cents)
B3
2022
537
(89)
(17)
(3)
(28)
400
(75)
325
1
326
41.8
2021
553
(79)
3
(2)
(43)
432
(61)
371
–
371
50.2
Stay-in-business capital expenditure is required to maintain our business
operations and includes major plant inspections and replacements of existing
assets.
B. Our funding
B1. Capital structure
Contact’s capital includes equity and net debt. Our objectives when managing
capital are to ensure Contact can pay its debts when they are due and to
optimise the cost of our capital.
To manage the capital structure, the Board of Directors may adjust the
amount and nature of distributions to shareholders, issue new shares and
increase or repay debt.
Contact manages its capital structure to support an investment grade credit
rating and a gearing ratio suitable to our operating environment.
Contact issued $225 million of capital bonds during the year which are
classified as subordinated debt.
$m
Borrowings
Shareholders’ equity
Total capital funding
Gearing ratio
Gearing ratio excluding subordinated debt
Note
B4
2022
1,099
2,840
3,939
27.9%
23.5%
2021
856
2,927
3,783
22.6%
22.6%
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
109
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022
Weighted average
Number of shares (basic)
Number of shares (diluted)
2022
2021
778,794,640 738,614,475
779,812,908 739,042,889
The basic earnings per share calculation uses the weighted average number
of shares on issue over the period.
The diluted weighted average number of shares takes into account the
number of performance share rights and deferred share rights that are
currently exercisable or will become exercisable depending on likelihood
of meeting vesting conditions.
Dividends paid
2020 final
2021 interim
30 June 2021
2021 final
2022 interim
30 June 2022
Comprising:
Cash dividends
Dividend reinvestment plan
Cents
per share
23.0
14.0
21.0
14.0
$m
165
109
274
163
109
272
242
30
On 12 August 2022, the Board resolved to pay a 90% imputed final dividend
of 21 cents per share on 27 September 2022. On 12 August 2022, Contact had
$41 million of imputation credits available for use in future periods.
B2. Share capital
Share capital comprises ordinary shares listed on the NZX and ASX. Certain
ordinary shares are held in trust on behalf of employees under the Contact
Share scheme (note E11). All shareholders are entitled to receive distributions
and to make one vote per share.
$30 million of shares issued during the year were from the dividend
reinvestment plan.
Balance at 30 June 2021
Share capital issued
Balance at 30 June 2022
Comprising:
Ordinary shares
Contact Share
B3. Distributions
Note
Number
$m
776,122,070
1,922
4,516,233
33
780,638,303
1,955
780,394,402
1,956
E11
243,901
(1)
Earnings and operating free cash flow per share
60
40
CONTENTS
FY22 SUMMARY
WHO WE ARE
20
.
4
3
2
.
3
5
2
Profit
(basic)
.
4
3
2
.
3
5
2
Profit
(diluted)
0
cps
.
8
1
4
.
2
0
5
Operating free
cash flow
(basic)
2022
2021
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
110
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022
B4. Borrowings
Borrowings are recognised initially at fair value less financing costs and
subsequently at amortised cost using the effective interest rate method.
Some borrowings are designated in fair value hedge relationships, which
means that any changes in market interest and foreign exchange rates result
in a change in the fair value adjustment on that debt.
Borrowings denoted with an asterisk (*) are Green Debt Instruments under
Contact’s Green Borrowing Programme, which has been certified by the
Climate Bonds Initiative. At 30 June 2022 Contact remains compliant with
the requirements of the programme. Further information is available on the
Sustainability section on Contact’s website.
$m
Maturity
Coupon
2022
2021
Bank overdraft
< 3 months
Floating
* Commercial paper
< 3 months
Floating
* Drawn bank facilities
Various
Floating
Lease obligations
Various
Various
* Retail bonds – CEN030
* Retail bonds – CEN040
* USPP notes – US$22m
* USPP notes – US$51m
* USPP notes – US$42m
* Retail bonds – CEN050
* USPP notes – US$58m
* USPP notes – US$43m
Nov 2021
Nov 2022
Dec 2023
Dec 2023
Dec 2023
Aug 2024
Dec 2025
Dec 2025
4.40%
4.63%
4.19%
4.09%
3.63%
3.55%
4.33%
3.85%
* Export credit agency facility
Nov 2027
Floating
* USPP notes – US$15m
* USPP notes – US$23m
* USPP notes – US$30m
* Capital bonds
Face value of borrowings
Deferred financing costs
Dec 2027
Dec 2028
Dec 2028
Nov 2051
3.95%
4.44%
4.51%
4.33%
Total borrowings at amortised cost
Fair value adjustment on hedged borrowings
Carrying value of borrowings
Current
Non-current
2
175
7
25
–
100
28
64
61
–
–
–
21
150
100
28
64
61
100
100
73
62
40
22
29
38
225
1,050
(6)
1,044
55
1,099
287
812
73
62
47
22
29
38
–
795
(3)
792
64
856
163
693
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
111
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022 Changes in borrowings
$m
Borrowings at the start of the year
Net cash borrowed/(repaid)
Non-cash change in lease obligations
Non-cash change in deferred financing costs
Non-cash change in fair value adjustment
Borrowings at the end of the year
2022
856
245
10
(3)
(9)
1,099
2021
1,198
(267)
3
1
(80)
856
Short-term funding
Contact uses bank facilities for general corporate purposes including to
manage its liquidity risk (note D2). Whilst drawings under our bank facilities
are typically for periods of three months or less, the amounts drawn down can
be rolled for the term of the facility. Drawn facilities are classified as current
when the facility will expire within one year of the reporting period end.
Contact’s total bank facilities have a range of maturities as follows:
Maturity $m
Between 1 and 2 years
Between 2 and 3 years
More than 3 years
2022
50
265
115
430
2021
–
50
380
430
All of these bank facilities form part of Contact’s Green Borrowing Programme.
Lease obligations
Contact’s leases predominately relate to property and connections to the
national electricity grid. These assets are included in the carrying value of
property, plant and equipment (note C1).
Security
Contact’s Deed of Negative Pledge and Guarantee and its United States
Private Placement (USPP) note agreements restrict Contact from granting
security interest over its assets, subject to certain permitted exceptions.
Because of these restrictions, Contact’s borrowings are all unsecured, except
for lease obligations secured over the leased assets. The Deed of Negative
Pledge and Guarantee and the USPP note agreements contain various debt
covenants, all of which Contact complied with during the reporting period.
Cash and cash equivalents
Cash and cash equivalents exclude bank overdrafts which are included within
borrowings. Contact trades electricity price derivatives on the ASX market using
a broker that holds collateral on deposit for margin calls. At 30 June 2022, this
collateral was $164 million (2021: $109 million) and is included within total cash
and cash equivalents of $168 million (2021: $150 million).
B5. Net interest expense
$m
Interest expense on borrowings
Interest expense on finance leases
Unwind of discount on provisions
Unwind of deferred financing costs
Capitalised interest
Interest income
Net interest expense
Note
E6
C1
2022
(48)
(1)
(5)
(1)
19
–
(36)
2021
(52)
(1)
(5)
(1)
8
1
(50)
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
112
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022
C. Our assets
Property, plant and equipment
C1. Property, plant and equipment
Balance at 1 July 2020
$m
Cost
Generation
plant and
equipment
Other land,
buildings,
plant and
equipment
Capital
work in
progress
Leased
assets
5,658
7
–
53
–
121
1
15
–
–
197
124
1
(53)
(2)
42
3
–
–
(3)
Additions
Acquisitions
Transfers from capital work in progress
Disposals
Total
6,018
135
16
–
(5)
6,164
359
–
(17)
(6)
6,500
(1,992)
(208)
(6)
3
(2,203)
(215)
12
1
–
–
(1)
51
(17)
(4)
–
3
(18)
(5)
–
1
Balance at 30 June 2021
5,718
137
267
42
Additions
7
Transfers from capital work in progress
Transfers to assets held for sale
Disposals
30
(17)
(5)
5
7
–
–
(37)
–
–
337
10
Balance at 30 June 2022
5,733
149
567
Depreciation and impairment
Balance at 1 July 2020
Depreciation charge
Acquisitions
Disposals
Balance at 30 June 2021
Depreciation charge
Acquisitions
Disposals
(1,872)
(200)
–
–
(2,072)
(206)
12
–
(102)
(4)
(6)
–
(112)
(4)
–
–
Balance at 30 June 2022
(2,266)
(116)
(1)
–
–
–
(1)
–
–
–
(1)
Carrying value
At 30 June 2021
At 30 June 2022
3,646
3,467
25
33
266
566
24
29
3,961
4,095
(22)
(2,405)
and intangible assets
Contact’s property, plant and equipment (PP&E)
and intangible assets include:
• Generation plant and equipment: hydro,
geothermal and thermal power stations and
geothermal wells and pipelines.
• Computer software: our SAP system that is
used for customer service and billing, finance
functions and generation asset management,
which has a carrying value of $135 million (2021:
$169 million) and a remaining life of seven years.
All assets are recognised at cost less accumulated
depreciation or amortisation and impairments.
Generation plant and equipment acquired before
1 October 2004 is recognised at deemed historical
cost, which is the fair value of those assets at
1 October 2004, less accumulated depreciation
and accumulated impairment losses.
Included within additions for the year ended
30 June 2022 is capitalised interest of $19 million
(2021: $8 million) in relation to the build of the
Tauhara geothermal plant and steamfield.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
113
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022
Intangible assets
$m
Cost
Balance at 1 July 2020
Additions
Acquistions
Disposals
Balance at 30 June 2021
Additions
Disposals
Transfer to assets held for sale
Balance at 30 June 2022
Amortisation
Balance at 1 July 2020
Amortisation charge
Balance at 30 June 2021
Amortisation charge
Balance at 30 June 2022
Carrying value
At 30 June 2021
At 30 June 2022
Current
Non-current
Software and
capital work in
progress
Carbon
emission
units
Other
Total
Cost
Contact capitalises the costs to purchase and bring assets into service. When
Contact develops an asset, employee time and other directly attributable
costs are capitalised and held as capital work in progress until the asset is
commissioned.
Contact capitalises costs to obtain resource consents and to drill geothermal
exploration wells. These costs are expensed if the existing area of operations
that they relate to is unsuccessful or abandoned. All other geothermal
exploration costs are expensed.
Carbon emission units are purchased to offset our emissions under the
New Zealand Emissions Trading Scheme (ETS). The units are measured at
weighted average cost. They are classified as current assets when they will
be used to offset our ETS obligations at balance date or obligations expected
to be incurred within one year of balance date.
Depreciation and amortisation
The cost of Contact’s assets is spread evenly over their useful lives (straight line
method) or, for certain thermal assets, over the equivalent operating hours
(EOH) those assets are expected to be of benefit to Contact.
Management estimates an asset’s useful life or EOH and this is reviewed annually.
Land, capital work in progress and carbon emission units are not depreciated
or amortised. The depreciation and amortisation rates for all other assets are:
486
87
16
(47)
542
122
(92)
(1)
571
(256)
(41)
(297)
(47)
(344)
Asset
Rate/hours
245
227
27
Generation plant and equipment
Straight line
Equivalent operating hours
Other buildings, plant and equipment
16
200
Computer software
1 – 33%
40,000 – 100,000
2 – 33%
5 – 50%
482
19
–
–
501
27
(1)
(1)
526
(256)
(40)
(296)
(46)
(342)
205
184
–
184
3
68
–
(47)
24
94
(91)
–
27
–
–
–
–
–
24
27
27
–
1
–
16
–
17
1
–
–
18
–
(1)
(1)
(1)
(2)
16
16
–
Capital commitments
At 30 June 2022, Contact was committed to $275 million of contracted capital
expenditure (2021: $334 million) and $150 million of carbon forward contracts
(2021: $60 million), of which $252 million is due within one year of balance date.
During the year ended 30 June 2022, Contact concluded its review of
existing software assets in light of the IFRIC agenda decision Configuration
or Customisation costs in a Cloud Computing Arrangement and wrote off
$1 million of software assets relating to software-as-a-service arrangements.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
114
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022
C2. Goodwill and asset impairment testing
Contact has two cash-generating units (CGUs): Wholesale and Retail. The
Retail CGU includes goodwill of $179 million (2021: $179 million). The Wholesale
CGU includes goodwill of $35 million (2021: $41 million, restated to $35 million)
following the acquisition of Simply Energy Limited and Western Energy
Services Limited in the prior year, and subsequent purchase price allocation.
Further information on the acquisition of Western Energy Services Limited is
provided in note E12.
Capital work in progress (CWIP) includes $493 million (2021: $223 million)
related to future generation developments, of which $9 million is not allocated
to a CGU.
The recoverable amount of an asset or CGU is calculated as the higher
of its value in use and fair value less costs to sell. Every reporting period
management estimates the value in use expected to be recovered from
Contact’s CGUs and any significant future generation developments in
CWIP that are not allocated to a CGU. An impairment is recognised when
the recoverable value is lower than the carrying value.
Determining value in use involves estimating future cash flows for each
CGU. These cash flows are adjusted for future growth based on historical
inflation and discounted at a post-tax discount rate between 6.5% and 7.5%
to arrive at the present value, or value in use, of each CGU. Future generation
developments are assessed separately until the build has substantially
commenced, however key inputs are the same as for the Wholesale CGU
plus an estimate of plant commissioning costs.
No impairments were recognised in the current or prior period.
The key inputs to CGU and future generation development cash flows, and
their method of determination, are:
Retail CGU
Post-tax discount rate and
inflation
External WACC report prepared by Cameron Partners
and implicit inflation rate.
Customer numbers and churn
Actual customer numbers adjusted for historical
churn data and expected market trends.
Margin per customer
Actual margin per customer adjusted for expected
market changes.
Estimated future capital
expenditure and operating costs
Budgeted capital and operating expenditure,
reflecting historical levels and known differences.
Cost of purchased energy
ASX future electricity prices adjusted for location and
seasonal shape.
Wholesale CGU and future generation developments
Post-tax discount rate and
inflation
External WACC report prepared by Cameron Partners,
and implicit inflation rate.
Wholesale electricity price path Modelled wholesale prices based on ASX future
Generation volume and mix
electricity prices adjusted for location and seasonal
shape, and price estimates based on an analysis of
expected demand and cost of new supply for periods
not quoted on the ASX market.
Generation strategy based on expected demand,
hydro volumes, planned outages and expected
market pricing.
Estimated future capital
expenditure and operating costs
Budgeted capital and operating expenditure,
reflecting historical levels and known differences.
Fuel costs
Contracted gas and carbon prices, otherwise
Contact’s best estimate of future prices.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
115
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022 Sensitivities
The calculation of the value in use for the CGUs is most sensitive to the inputs
for wholesale electricity prices and the post tax discount rate.
Wholesale electricity prices are influenced by a number of factors that are
difficult to predict, in particular weather, which can impact short-term prices.
Wholesale electricity prices may also be adversely affected by a reduction
in demand, the availability of fuel and generation capacity in the wholesale
electricity market, competitor and transmission system availability.
The post-tax discount rate is an estimate of Contact’s weighted average cost
of capital and is influenced by a number of external factors such as the risk-
free rate and inflation.
The sensitivity of the valuation model to the wholesale electricity prices and
discount rate, where all other inputs remain constant, is as follows:
Significant unobservable inputs
Sensitivity
Impact $m
D1. Market risk
Interest rate risk
Contact has fixed and floating rate debt and is exposed to movements in
interest rates. For fixed rate debt the exposure is to falling interest rates as
Contact could have secured that debt at lower rates, while for floating rate
debt there is uncertainty of future cash interest payments.
Contact manages these risks through the use of interest rate swaps (IRS)
and cross-currency interest rate swaps (CCIRS) to ensure that the total debt
portfolio has an appropriate amount of fixed and floating rate exposure.
The risk is monitored by assessing the notional amount of debt on a fixed
and floating basis and ensuring this is in accordance with set policies.
Foreign exchange risk
Contact is exposed to movements in foreign exchange rates through its
commitments to pay certain suppliers and United States Private Placement
(USPP) note holders.
Post tax discount rate
Wholesale electricity price path
- 0.5%
+ 0.5%
+ 10%
- 10%
+ 663
- 563
+ 515
- 515
To mitigate this risk, forward foreign exchange contracts are used to fix future
cash flows in NZD terms. Foreign debt is hedged through the use of CCIRS,
which converts foreign currency principal and interest payments to NZD at
a fixed exchange rate.
The value in use exceeded the carrying value for all sensitivities carried out.
There is interrelation between the key inputs in the valuation. Any changes
in the price path and post tax discount rate would not occur in isolation and
would drive other changes which could also impact the value in use.
D. Our financial risks
Contact’s financial risk management system mitigates exposure to market,
liquidity and credit risks by ensuring that material risks are identified, the
financial impact is understood and tools and limits are in place to manage
exposures. Written policies provide the framework for Contact’s financial risk
management system.
Commodity price risk
Contact is exposed to electricity price risk through the sale and purchase of
electricity on the wholesale electricity market. Contact’s integrated Wholesale
and Retail businesses provide a natural hedge for most of this exposure.
Derivatives may be used to fix the price at which Contact buys or sells any
residual exposure to electricity price risks. In addition, Contact is party to a
fixed price swaption to provide cover in extreme price situations.
Contact is also exposed to natural gas price risk on purchases of natural gas.
Short- and long-term gas purchase contracts are used to fix the price of
gas. These are not derivative financial instruments. Related to this, Contact is
exposed to carbon price risk on its carbon obligations. Spot purchases, forward
purchases and auction participation are used to manage the price risk relating
to carbon.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
116
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022
Summary of derivative financial instruments
A summary of the exposures from derivatives and the impact on Contact’s
financial position is provided below grouped by type of hedge relationship.
Further information on hedging activities and fair value of derivatives is
provided in notes E8 and E9.
Fair value
hedge
Cash flow
and fair value
hedge
$m
2022
Notional amount of derivatives
Maturity years
Average rate/price
Cash flow hedge
Electricity
price
derivatives
Foreign
exchange
contracts
No hedge
relationship
Electricity
price
derivatives
IRS
350
CCIRS
IRS
376
1,195
13,833 GWh
118
2,456 GWh
2022 – 2029
2023 – 2028
2022 – 2027
2022 – 2039
2022 – 2026
2022 – 2025
4.5%
5%/0.75USD1
3.1%
$99/MWh
Various2
$145/MWh
Carrying value of derivatives – asset
–
75
37
3
3
33
Carrying value of derivatives – liability
(16)
(5)
(4)
(154)
(5)
(42)
Carrying value of hedged borrowings
(331)
(448)
–
–
–
Fair value adjustments to borrowings
16
(71)
–
–
–
–
–
2021
Notional amount of derivatives
188
376
800
6,160 GWh
179
1,220 GWh
Maturity years
Average rate/price
2021 – 2024
2023 – 2028
2021 – 2027
2021 – 2025
2021 – 2026
2021 – 2024
1.7%
2.5%/0.75USD
3.2%
$83/MWh
Various
$128/MWh
Carrying value of derivatives – asset
5
59
5
32
3
22
CONTENTS
Carrying value of derivatives – liability
–
(5)
(53)
(93)
(2)
(24)
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
117
Carrying value of hedged borrowings
(192)
(436)
–
–
–
–
Fair value adjustments to borrowings
(5)
(59)
–
–
–
–
Average interest rates for IRS and CCIRS are based on their pay legs. For pay-float
swaps (CCIRS and IRS in fair value hedges), the rate comprises the floating
base rate plus the margin. The CCIRS liability arises from the cash flow hedge
component. Notionals, maturities and average prices for electricity price
hedges not in hedge relationships do not include options not yet called.
1 The NZD/USD closing spot rate at 30 June 2022 was 0.62.
2 Average exchange rates include 0.93 AUD, 0.58 EUR, 0.68 USD and 76.74 JPY.
Total
151
(226)
(779)
(55)
126
(176)
(628)
(64)
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022
Change in fair value of derivatives recognised in the statement of comprehensive income
$m
2022
Hedge ineffectiveness
Hedge effectiveness
Non-hedge movements
Fair value
hedge
Cash flow
and fair value
hedge
IRS
CCIRS
IRS
Cash flow hedge
Electricity
price
derivatives
Foreign
exchange
contracts
No hedge
relationship
Electricity
price
derivatives
–
–
24
–
–
–
(21)
12
–
–
–
–
–
–
–
–
–
(10)
Fair value adjustments to hedged borrowings
21
(12)
–
–
–
–
Total change in fair value of financial instruments
recognised in profit/(loss)
–
–
24
–
–
(10)
Hedge effectiveness recognised in OCI
–
4
52
(125)
(2)
–
Amortisation of hedge reserve balance
–
–
–
(10)
(1)
–
Amounts reclassified to profit/(loss)
–
–
5
38
–
–
2021
Hedge ineffectiveness
Hedge effectiveness
Non-hedge movements
–
–
8
–
–
–
(7)
(73)
–
–
–
–
–
–
–
–
–
(1)
Fair value adjustments to hedged borrowings
7
73
–
–
–
–
Total change in fair value of financial instruments
recognised in profit/(loss)
–
–
8
–
–
(1)
CONTENTS
Hedge effectiveness recognised in OCI
–
(3)
27
(61)
1
–
FY22 SUMMARY
Amounts reclassified to profit/(loss)
–
–
7
25
–
–
Total
24
(9)
(10)
9
14
(71)
(11)
43
8
(80)
(1)
80
7
(37)
32
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
118
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022
Sensitivities
The table (right) summarises the impact on
derivative valuations of possible changes
in forward wholesale electricity prices and
forward interest rates. The analysis assumes
that all variables were held constant except
for the relevant market risk factor. The amounts
in the table represent the impact of changes
in the market risk factors on the derivative
valuations. These movements would be offset
elsewhere by an opposite movement on the
hedged item.
$m
Favourable/(unfavourable)
Hedging impact on hedge reserves
Forward interest rates
Forward electricity prices
Forward foreign exchange rates
Hedging impact on post-tax profit/(loss)
Forward interest rates
Forward electricity prices
2022
2021
8
(7)
(76)
76
11
(8)
2
2
(6)
6
12
(2)
(27)
28
18
(14)
7
–
1
(1)
+100bps
-25bps
+10%
-10%
+10%
-10%
+100bps
-25bps
+10%
-10%
D2. Liquidity risk
To manage liquidity risk, Contact maintains a
diverse portfolio of funding, debt maturities
are spread over a number of years and any
new financing or refinancing requirements
are addressed with an appropriate lead time.
Contact maintains a buffer of undrawn bank
facilities over its forecast funding requirements
to enable it to meet any unforeseen cash flows.
Management monitors the available liquidity
buffer by comparing forecast cash flows to
available facilities to ensure sufficient liquidity
is maintained in accordance with internal
limits.
Information on contracted cash flows in the
table (right) is presented on an undiscounted
basis.
CCIRS cash flows are included within
Borrowings in the table. US dollar inflows on
the CCIRS offset the US dollar outflows on the
USPP notes.
$m
2022
Trade and other payables
Borrowings
Electricity price derivatives – net settled
IRS – net settled
Foreign exchange derivatives – inflow
Foreign exchange derivatives – outflow
2021
Trade and other payables
Borrowings
Electricity price derivatives – net settled
IRS – net settled
Foreign exchange derivatives – inflow
Foreign exchange derivatives – outflow
Total
contractual
cash flows
Less than
1 year
1–2 years
2–5 years
More than
5 years
(177)
(1,296)
(157)
16
116
(118)
(1,617)
(197)
(918)
(64)
3
178
(180)
(177)
(234)
(67)
(6)
104
(106)
(486)
(197)
(193)
(27)
(8)
93
(93)
–
–
–
(198)
(53)
2
6
(6)
(330)
(64)
19
6
(6)
(535)
27
1
–
–
(249)
(375)
(507)
–
–
–
(139)
(23)
(3)
(463)
(14)
13
(123)
–
1
74
11
–
(75)
(12)
–
(1,178)
(425)
(166)
(465)
(122)
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
119
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022
D3. Credit risk
Total credit risk exposure is measured by the financial instruments in an asset
position of $530 million (2021: $476 million). To minimise credit risk exposure,
Contact has a policy to only transact with credit worthy counterparties and
to not exceed internally imposed exposure limits to any one counterparty.
Where appropriate, collateral is obtained. Further information on customer
related credit risk is provided in note E4.
E. Other disclosures
E1. Tax
Tax expense is made up of current tax expense and deferred tax expense.
Current tax expense relates to the current financial reporting period while
deferred tax will be payable in future periods.
Tax is recognised in profit, except when it relates to items recognised directly
in OCI.
$m
Profit before tax
Tax at 28%
Tax effect of adjustments:
– Other
Tax expense
Current
Deferred
2022
253
(71)
–
(71)
(87)
16
2021
261
(73)
(1)
(74)
(91)
17
Contact’s deferred tax liability is calculated as the difference between the
carrying value of assets and liabilities for financial reporting purposes and
the values used for taxation purposes.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
120
$m
Balance at 1 July 2020
Recognised in profit/(loss)
Recognised in balance sheet
Recognised in OCI
Recognised in other reserves
Balance at 30 June 2021
Recognised in profit/(loss)
Recognised in balance sheet
Recognised in OCI
Recognised in other reserves
PP&E and
intangible
assets
Derivative
financial
instruments
Other
Total
(712)
16
(3)
–
–
(699)
26
–
–
–
34
(2)
–
25
3
(1)
2
–
–
34
(8)
–
8
–
34
1
28
(2)
(2)
–
(1)
23
(653)
17
(4)
2
1
(637)
16
(2)
8
(1)
(616)
Balance at 30 June 2022
(673)
E2. Operating expenses
Other operating expenses (note A2) include total labour costs of $107 million
(2021: $111 million). Labour costs include contributions to KiwiSaver of $4 million
(2021: $3 million).
Audit fees paid to Contact’s auditor (KPMG) amounted to $564,500 for review
of the interim, and audit of the year end, financial statements (2021: $541,000).
Other fees paid to the auditor were $100,500 for other assurance work (2021:
$53,750), and $3,500 for supervisor reporting (2021: $3,500). Other assurance
work relates to review of greenhouse gas emissions reporting, Global
Reporting Initiative indicators and our Green Borrowing Programme.
E3. Inventories
Contact’s inventories comprise gas in storage for use in thermal generation,
consumables and spare parts for power stations, and diesel fuel for use in the
Whirinaki power plant. Inventory gas is measured at weighted average cost.
All other inventories are stated at cost.
$m
Inventory gas
Consumables and spare parts
Diesel fuel
2022
2021
41
13
4
58
56
10
3
69
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022
E4. Trade and other receivables
$m
Trade receivables
Unbilled receivables
Provision for impairment
Net trade receivables
Contract assets
Prepayments
2022
133
83
(2)
214
7
6
2021
168
76
(2)
242
9
4
Trade and unbilled receivables are recognised net of discounts based on past
experience of the amount of discounts taken up by customers.
Unbilled receivables represent Contact’s best estimate of unbilled retail sales
at the end of the reporting period. The estimate uses smart meter data to
determine the relevant unbilled amount for the period. Consumption history
is used if smart meter data is not available.
Ageing of trade receivables past due but not impaired are:
$m
Less than one month
Greater than one month
$m
Opening balance
Additions
Amortised to revenue
Closing balance
227
255
Amortised to operating expenses
2022
2021
$m
11
3
14
12
4
16
Trade payables and accruals
Employee benefits
Interest payable
Other liabilities
Trade and other payables
Contract assets
Contact capitalises the incremental costs incurred to acquire new customers
and amortises these costs to operating expenses over the expected life of the
customer relationship. Incentives given to customers are also capitalised as a
contract asset and amortised to revenue over a period of one to three years.
Of the total contract assets balance, $5 million (2021: $7 million) is expected to
be amortised within one year of the reporting period end and the remainder
between one to three years of the reporting period end.
E5. Trade and other payables
2022
2021
9
6
(7)
(1)
7
13
8
(10)
(2)
9
2022
211
17
4
29
261
2021
251
27
3
24
305
When Contact has been unable to collect amounts due from customers
those debts are written off. Trade receivables, net of recoveries, of $2 million
(2021: $1 million) were written off during the reporting period.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
121
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022
Other
Total
Change in fair value of financial instruments
(14)
E6. Provisions
Contact recognises restoration and environmental rehabilitation provisions for
the expected costs to abandon and restore geothermal wells and generation
sites and to remove asbestos from properties.
Other provisions include $8 million for Simply Energy performance payments
(2021: $8 million).
$m
Balance at 1 July 2021
Created
Released
Utilised
Unwind of discount
Balance at 30 June 2022
Current
Non-current
Restoration/
environmental
rehabilitation
(50)
(1)
–
1
(5)
(55)
(5)
(50)
(24)
(3)
7
2
–
(18)
(10)
(8)
(74)
(4)
7
3
(5)
(73)
(15)
(58)
These provisions are based on estimates of future cash flows to make good
the affected sites at the end of the assets’ useful lives. The expected future
cash flows are discounted to their present value using a pre-tax discount
rate equivalent to a post-tax rate of between 6.5% and 7.5%.
E7. Profit to operating cash flows
A reconciliation of profit to operating cash flows is provided below.
$m
Profit
Depreciation and amortisation
Amortisation of contract assets
2022
182
262
8
Hedge reserve balance to be amortised
Movement in provisions
Deferred finance costs
Bad debt expense
Share-based compensation
Share of profit/loss in associates
Changes in assets and liabilities, net of non-cash,
investing and financing activities
Trade and other receivables
Inventories and intangible assets
Trade and other payables
Tax payable
Deferred tax
Operating cash flows
(10)
(4)
1
3
4
3
20
8
(45)
(3)
(15)
400
2021
187
249
11
(7)
–
2
1
2
2
1
(68)
(35)
92
11
(16)
432
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
122
E8. Hedging activities
Contact has designated derivatives used to manage market risks into fair
value and cash flow hedge relationships. A hedge ratio of 1:1 is applied for
all hedge relationships, as the notional value of the derivative matches the
notional value of the hedged item.
Fair value hedges
Interest rate risk
The derivatives (IRS) Contact uses to manage its interest rate risk meet the criteria
for hedge accounting where they directly relate to issued debt. The hedge is
against future fair value movements in the debt and can be for a portion of the
debt. Contact has designated $350 million of retail bonds into fair value hedge
relationships with receive-fixed, pay-floating IRS. The fixed interest rates and
other terms match the relevant bond to create an economic relationship.
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022
The bonds are recognised at amortised cost. Both the hedged risk and the
hedging instrument (IRS) are recognised at fair value. The change in the
fair value of both items is recognised in profit/(loss) and will offset to the
extent the hedging relationship is effective. There are no material sources of
ineffectiveness.
Cash flow hedges
The derivatives Contact uses to manage exposure to wholesale electricity
prices, floating interest rate risk and foreign exchange rates usually qualify
for cash flow hedge accounting. For cash flow hedges, only the derivative
is recognised at fair value with the effective portion of all changes in fair
value recognised in the cash flow hedge reserve. Any ineffective portion is
recognised immediately in profit/(loss). Amounts recognised in the cash flow
hedge reserve are reclassified to profit/(loss) or the Statement of Financial
Position according to the nature of the hedged item.
The movement in hedge reserves is reconciled below.
Note
2022
2021
$m
Opening balance
Effective portion of cash flow hedges
D1
Amortisation of hedge reserve
Transferred to revenue
Transferred to deferred tax
Closing balance
(51)
(71)
(11)
43
8
(82)
(49)
(37)
–
33
2
(51)
Included in the closing balance at 30 June 2022 is $2 million relating to the
cost of hedging reserve (2021: $3 million).
Commodity price risk
Contact designates forecast electricity sales and purchases into cash flow
hedges with electricity price derivatives. Volumes are matched to create an
economic relationship. There are no material sources of ineffectiveness.
Interest rate risk
Contact designates a certain level of its floating rate exposure into cash flow
hedges with receive-floating, pay-fixed IRS in line with set internal policies.
An economic relationship exists between the floating rate exposure and the
IRS based on the reference interest rate. Ineffectiveness arises due to IRS that
have been designated into hedge relationships part way through their term.
These IRS were designated on 1 July 2018 on adoption of NZ IFRS 9.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
123
Combined fair value and cash flow hedges
Contact has designated all its USPP notes into both fair value and cash flow
hedge relationships with CCIRS, depending on the component of the USPP
note being hedged:
• For the fair value hedges the change in fair value of the USPP note is
recognised in profit/(loss) to offset the change in fair value of the relevant
CCIRS component.
• For the cash flow hedges the change in fair value of the CCIRS component
is recognised in the cash flow hedge reserve.
• The cost to convert foreign currency cash flows under CCIRS is excluded
from the hedge relationship and recognised in the cost of hedging reserve.
An economic relationship exists based on the reference interest rates,
exchange rate and other terms. There are no material sources of
ineffectiveness.
Derivatives not in hedge relationships
These are electricity price derivatives purchased and sold as part of a
requirement to participate in the ASX futures electricity market, electricity
derivatives entered into for profit-making, financial transmission rights and
electricity price options. All changes in fair value of these derivatives are
recognised directly in profit/(loss).
E9. Financial instruments at fair value
Fair value
Contact uses discounted cash flow valuations with market observable data, to
the extent that it is available, in estimating the fair value of all derivatives and
borrowings. The key variables used in these valuations are forward prices (for
the relevant underlying interest rates, foreign exchange rates and wholesale
electricity prices) and discount rates (based on the forward IRS curve adjusted
for counterparty risk).
All inputs are sourced or derived from market information except for forward
wholesale electricity prices which are:
• derived from ASX market quoted prices adjusted for Contact’s estimate of
the effect of location and seasonality, or
• when quoted prices are not available or relevant (i.e. long dated and large
contracts), Contact’s best estimate of the cost of new supply is used. This is
derived using key unobservable inputs, relevant wholesale market factors
and management judgement.
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022
Additional key inputs and assumptions used to determine the fair value of
electricity derivatives include Contact’s best estimate of volumes called over
the life of electricity options and forward quoted commodity prices
(e.g. adjustments as a consequence of initial recognition differences).
E10. Financial instruments at amortised cost
The value of financial instruments carried at amortised cost is provided in the
table below.
The following table provides a breakdown of the fair value of derivatives by
the source of key valuation inputs:
$m
$m
Sourced from market data
Derived from market data
Electricity price estimates
2022
2021
(81)
86
(81)
(76)
(20)
12
(42)
(50)
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Borrowings
The fair value of borrowings is $1,105 million (2021: $852 million). This fair value
is derived from market data.
2022
168
211
(177)
(1,044)
2021
150
207
(197)
(792)
The electricity price derivatives most affected by estimates are reconciled
below:
E11. Share-based compensation
$m
Opening balance
Gain/(loss) in profit/(loss):
– wholesale electricity revenue
Gain/(loss) in OCI
Instruments issued
Closing balance
2022
(42)
16
(21)
(34)
(81)
2021
(11)
10
(4)
(37)
(42)
Equity Scheme
Contact provides an equity award to certain eligible employees made up of
performance share rights (PSRs) and deferred share rights (DSRs). Options are
no longer issued and all outstanding options were exercised or lapsed during
the year. If performance hurdles are met, or there is a company change in
control, the awards vest and become exercisable. On exercise, PSRs and DSRs
convert to ordinary shares at no cost to the employee. There are no holding/
retention periods or ownership requirements for employees who exercise
equity rights. The awards lapse if the performance hurdles are not met, if they
are not exercised by the lapse date or if an employee voluntarily leaves Contact.
The scheme continues on redundancy but the entitlements are adjusted.
For these derivatives a 10% increase in the electricity price would result in
an unfavourable movement in fair value of $78 million (2021: $20 million)
and a 10% decrease would result in a favourable movement in fair value
of $78 million (2021: $21 million).
Outstanding options and weighted average exercise price
Balance at 1 July 2020
Lapsed
Balance at 30 June 2021
Exercised
Lapsed
Balance at 30 June 2022
Options
Number
outstanding
1,499,654
(555,559)
944,095
(660,866)
(283,229)
–
Price
$5.33
$4.97
$5.54
$5.54
$5.54
–
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
124
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022
Outstanding PSRs and DSRs
Number outstanding
Balance at 1 July 2020
Granted
Exercised
Lapsed
These shares have a weighted average remaining life of 1 year and 4 months
(2021: 1 year and 4 months).
PSRs
DSRs
586,515
670,179
Changes in share-based compensation reserve
Note
2022
2021
228,761
301,355
$m
–
(434,021)
Opening balance
(151,518)
(33,141)
Exercised share scheme awards
Balance at 30 June 2021
663,758
504,372
Lapsed share scheme awards
Granted
Exercised
Lapsed
232,556
497,697
Share-based compensation expense
(223,869)
(273,197)
Deferred tax on share scheme
E1
(100,305)
(15,671)
Closing balance
8
(3)
(1)
4
–
8
8
(4)
–
3
1
8
Balance at 30 June 2022
572,140
713,201
PSRs had a weighted average remaining life of 2 years and 6 months
(2021: 1 year and 11 months) and DSRs had 1 year and 1 month (2021: 11 months).
Contact Share
Contact Share is Contact’s employee share ownership plan that enables
eligible employees to acquire a set number of Contact’s ordinary shares.
The shares are issued and legally held by a trustee company for a restrictive
period of three years, during which time the employee is entitled to receive
distributions and direct the exercise of voting rights that attach to shares held
on their behalf.
At the end of the restrictive period the shares are transferred to the employee.
Employees who leave Contact due to redundancy, and in certain other
circumstances, may have their shares transferred at that time; all other
employees who leave Contact have their shares transferred to an unallocated
pool. Shares in the unallocated pool can be used by the trustee company for
future allocations under Contact Share.
Number outstanding
Balance at 1 July 2020
Shares purchased
Transferred to employees
Balance at 30 June 2021
Shares issued
Transferred to employees
Balance at 30 June 2022
Contact Share
278,155
87,741
(98,234)
267,662
66,172
(89,933)
243,901
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
125
Share-based compensation expense
Share-based compensation expense is based on the fair value of the awards
granted, adjusted to reflect the number of awards expected to vest. The fair
values of awards granted during the reporting period are:
$ per
share
9
8
7
6
5
4
3
2
1
0
PSRs – with
Relative TSR
hurdle
PSRs – with
internal hurdle
DSRs
Contact Share
Key inputs in determining the fair values
Risk-free interest rate
Expected dividend yield
Expected share price volatility
2022
1%
5%
30%
2022
2021
2021
0.1%
6%
25%
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022
E12. Related parties
Contact group entities
Name of entity
Subsidiaries
Principal activity
Holding Country
Simply Energy Limited
Energy solutions
100% New Zealand
Western Energy Services Limited
Geothermal well services
100% New Zealand
Contact Energy Trustee Company
Limited
Trust for Contact Share
100% New Zealand
Capital contributions
Contact Energy Risk Limited
Captive insurance
100% Cook Islands
Associates
Drylandcarbon One Limited
Partnership
Investment in forestry
16.5% New Zealand
Forest Partners Limited Partnership Investment in forestry
14% New Zealand
Western Energy Services Limited
During the financial year, Contact finalised the acquisition accounting for Western
Energy Services Limited. $8 million has been allocated to brand and intellectual
property, with a related $2m deferred tax liability, resulting in a $6 million reduction
of goodwill. Refer to the related parties disclosure in the 2021 Annual Report for
provisional calculations at 30 June 2021, which have been restated.
Drylandcarbon One Limited Partnership and Forest Partners Limited
Partnership
On 11 April 2022, Contact acquired 14% of Forest Partners Limited Partnership
(Forest Partners) by committing to invest up to $37.5 million of capital over the
next five years.
Both Drylandcarbon and Forest Partners invest in afforestation projects on
economically marginal land in New Zealand to produce a stable supply of
carbon units which will offset Contact’s carbon obligations.
Drylandcarbon and Forest Partners are accounted for as associates, as Contact
has significant influence over both entities through its participation in financial
and operating policy decisions being equivalent to the other investors.
Contact applies the equity method of accounting for its investments in
Drylandcarbon and Forest Partners. The initial investments are recognised at
cost and are subsequently adjusted for Contact’s share of the entity’s profits
or losses.
CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
126
Related party transactions
Contact’s related parties also include its Directors and the Leadership Team
(LT). Transactions with Simply up until acquisition date are disclosed below.
Received/(paid) $m
Simply Energy Limited
Electricity contracts
Drylandcarbon One Limited Partnership
Forest Partners Limited Partnership
Capital contributions
Key management personnel
Directors’ fees
LT – salary and other short-term benefits1
LT – share-based compensation expense
Balances payable at end of the year
Key management personnel
2022
2021
–
(9)
(2)
(1)
(7)
(1)
(1)
1
(7)
–
(1)
(5)
(1)
(2)
1. Salary and other short-term benefits is the cash amount paid in the year
Members of the LT and directors purchase goods and services from Contact for
domestic purposes on normal commercial terms and conditions. For members
of the LT this includes the staff discount available to all eligible employees.
E13. New accounting standards
There are no new accounting standards issued but not yet effective which
materially impact Contact.
E14. Contingencies
In the normal course of business, Contact is subject to inquiries, claims and
investigations.
In late 2021 Contact was notified of an unexpected and unexplained increase in
pressure recorded in the Ahuroa Gas Storage facility by the owner and operator,
Flexgas, to whom Contact sold the facility in 2018. This suggests the current storage
capacity of the facility is less than previously thought, which may impact the
storage capacity available to Contact. Contact and Flexgas have formed a joint
technical working group to investigate these concerns and assess whether there
are actions that could be taken to improve the performance of the facility. The
technical working group is expected to report back within the next reporting period.
There are no other material matters to disclose in this respect at 30 June 2022.
Contact INTEGRATED REPORT 2022Notes to the financial statements for the year ended 30 June 2022
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FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
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STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
127
Combined Independent Auditor’s
and Limited Assurance Report
General
Our assurance procedures consisted of the audit of the Consolidated
Financial Statements of Contact Energy Limited and limited assurance
procedures in relation to Contact Energy Limited’s Global Reporting
Initiative (‘GRI’) disclosures within Contact Energy Limited’s Annual Report.
Our scope can be summarised as follows:
Consolidated Financial Statements
GRI Disclosures
Audit Scope
Reasonable assurance
Assurance Scope
Limited assurance
Other Information in Contact Energy Limited’s Annual Report
Consider consistency with Consolidated Financial Statements
No assurance
Independent Auditor’s Report
To the shareholders of Contact Energy Limited
Report on the audit of the consolidated financial statements
Opinion
In our opinion, the accompanying
consolidated financial statements of
Contact Energy Limited (the ’company’),
the entities over which it has control
and its associates (the 'group') on
pages 102 to 126:
i. present fairly in all material respects
the Group’s financial position as
at 30 June 2022 and its financial
performance and cash flows for
the year ended on that date; and
ii. comply with New Zealand Equivalents
to International Financial Reporting
Standards and International Financial
Reporting Standards.
We have audited the accompanying
consolidated financial statements
which comprise:
• the consolidated statement of
financial position as at 30 June 2022;
• the consolidated statements of
comprehensive income, changes
in equity and cash flows for the year
then ended; and
• notes, including a summary of
significant accounting policies
and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (New Zealand) (‘ISAs (NZ)’). We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the group in accordance with Professional and
Ethical Standard 1 International Code of Ethics for Assurance Practitioners
(including International Independence Standards) issued by the New Zealand
Auditing and Assurance Standards Board and the International Ethics
Standards Board for Accountants’ International Code of Ethics for Professional
Accountants (including International Independence Standards) (‘IESBA
Code’), and we have fulfilled our other ethical responsibilities in accordance
with these requirements and the IESBA Code.
Our responsibilities under ISAs (NZ) are further described in the auditor’s
responsibilities for the audit of the consolidated financial statements section
of our report.
Please refer to the section of our report entitled “Our independence and quality
control” below for detail of the other services we have provided to the group.
Scoping
The scope of our audit is designed to ensure that we perform adequate work to
be able to give an opinion on the consolidated financial statements as a whole,
taking into account the structure of the group, the financial reporting systems,
processes and controls, and the industry in which it operates. The context for our
audit is set by the group's major activities being wholesale electricity generation
and an electricity retailer in the financial year ended 30 June 2022.
Materiality
The scope of our audit was influenced by our application of materiality.
Materiality helped us to determine the nature, timing and extent of our audit
procedures and to evaluate the effect of misstatements, both individually
and on the consolidated financial statements as a whole. The materiality
for the consolidated financial statements as a whole was set at $12.5 million
determined with reference to a benchmark of group profit before tax.
We chose the benchmark because, in our view, this is a key measure
of the group’s performance.
Contact INTEGRATED REPORT 2022
Key audit matters
Key audit matters are those matters that, in our professional judgement,
were of most significance in our audit of the consolidated financial
statements in the current period. We summarise below those matters
and our key audit procedures to address those matters in order that the
shareholders as a body may better understand the process by which
we arrived at our audit opinion. Our procedures were undertaken in the
context of and solely for the purpose of our statutory audit opinion on the
consolidated financial statements as a whole and we do not express discrete
opinions on separate elements of the consolidated financial statements.
The key audit matter
How the matter was addressed in our audit
Carrying value of cash-generating units – Note C2 of the financial statements
The Group separates its
business into two cash-
generating units (CGUs) for the
purpose of asset impairment
testing. The value of each
CGU, including any allocated
goodwill, is supported by a
discounted cash flow model
which is inherently subjective.
In terms of the Wholesale CGU
we focus on the generation
assets due to the significance
of the assets relative to the
Group’s financial position and
goodwill related to recent
acquisitions.
Our focus for the customer
CGU is the valuation of goodwill
of $179 million.
The key judgements in
determining the CGUs’ value
in use are: forward electricity
prices, future generation
volumes, customer transfer
price and margin, forecast
operating and asset costs, the
terminal growth rate and the
discount rate applied to the
future cash flows.
Our work to assess whether the Group should
recognise any impairment to the CGUs included
ensuring the methodology adopted in the model
is consistent with accepted valuation approaches.
We also assessed whether the modelled cash flows
appropriately reflect the Group’s strategy and budget.
As part of this we considered the appropriateness
of inclusion of the Tauhara future generation
development within the wholesale CGU.
We tested the significant judgements in the modelled
cash flows by comparing:
• forward electricity prices to external projections;
• future generation volumes to historical volumes;
• customer transfer price and margin to budget,
historic data;
• operating costs and asset renewal costs to historical
levels and budgets; and
• the modelled terminal growth and discount rates
to our own independently determined rates.
We challenged the assumptions by performing
a sensitivity analysis, considering a range of likely
outcomes based on various scenarios. We are satisfied
that the key assumptions are within acceptable
ranges and in line with current market view.
As an overall test we compared the market-based
enterprise value of $6.7 billion to the Group’s carrying
value at 30 June 2022 of $4.4 billion.
Other information
The Directors, on behalf of the group, are responsible for the other information
included in the entity’s Annual Report. Other information includes Key activity
this financial year, Chair/CEO report, Who we are, Creating value, Strategic
themes, Strategic enablers, Governance matters and Additional disclosures.
Our opinion on the consolidated financial statements does not cover any other
information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the consolidated
financial statements or our knowledge obtained in the audit or otherwise
appears materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information,
we are required to report that fact. We have nothing to report in this regard.
Use of this independent auditor’s report
This independent auditor’s report is made solely to the shareholders as
a body. Our audit work has been undertaken so that we might state to
the shareholders those matters we are required to state to them in the
independent auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone
other than the shareholders as a body for our audit work, this independent
auditor’s report, or any of the opinions we have formed.
Responsibilities of the Directors for the consolidated
financial statements
The Directors, on behalf of the company, are responsible for:
• the preparation and fair presentation of the consolidated financial
statements in accordance with generally accepted accounting practice in
New Zealand (being New Zealand Equivalents to International Financial
Reporting Standards) and International Financial Reporting Standards;
• implementing necessary internal control to enable the preparation of a
consolidated set of financial statements that is fairly presented and free
from material misstatement, whether due to fraud or error; and
• assessing the ability to continue as a going concern. This includes
disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless they either intend to liquidate or
to cease operations, or have no realistic alternative but to do so.
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CONTENTS
FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
128
Contact INTEGRATED REPORT 2022
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FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
129
Auditor’s responsibilities for the audit of the consolidated
financial statements
Our objective is:
• to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due
to fraud or error; and
• to issue an independent auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee
that an audit conducted in accordance with ISAs (NZ) will always detect a
material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material
if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these
consolidated financial statements.
A further description of our responsibilities for the audit of these
consolidated financial statements is located at the External Reporting
Board (XRB) website at:
http://www.xrb.govt.nz/standards-for-assurance-practitioners/auditors-
responsibilities/audit-report-1/
This description forms part of our independent auditor’s report.
Independent limited assurance report on the GRI Disclosures
To the Directors of Contact Energy Limited
Conclusion
Our limited assurance conclusion has been formed on the basis of the matters
outlined in this report.
Based on our limited assurance engagement, nothing has come to our attention
that would lead us to believe that the Global Reporting Initiative disclosures of the
company (as referenced on pages 96 to 100 in the GRI index within the Annual
Report) (‘GRI disclosures’) have not, in all material respects, been prepared in
accordance with the Global Reporting Initiative Reporting Standards 2021
(‘GRI Standards’), for the period 1 July 2021 to 30 June 2022.
Basis for conclusion
We have performed an engagement to provide limited assurance in
relation to whether anything has come to our attention to indicate the GRI
disclosures have not been prepared in all material respects in accordance
with the GRI Standards for the year ended 30 June 2022.
Standards we followed
We conducted our limited assurance engagement in accordance with
International Standard on Assurance Engagements (New Zealand) 3000
(Revised) Assurance Engagements other than audits or reviews of historical
financial information and Standard on Assurance Engagements SAE 3100
(Revised) Assurance Engagements on Compliance. We believe that the
evidence we have obtained is sufficient and appropriate to provide a basis
for our conclusion. In accordance with those standards we have:
• used our professional judgement to plan and perform the engagement to
obtain limited assurance that the information subject to assurance is free
from material non-compliance, whether due to fraud or error;
• considered relevant internal controls when designing our assurance
procedures, however we do not express a conclusion on the effectiveness
of these controls; and
• ensured that the engagement team possess the appropriate knowledge,
skills and professional competencies.
Use of this limited assurance report
Our report should not be regarded as suitable to be used or relied on by
any parties other than Contact Energy Limited for any purpose or in any
context. Any party other than Contact Energy Limited who obtains access
to our report or a copy thereof and chooses to rely on our report (or any part
thereof) will do so at its own risk.
To the fullest extent permitted by law, we accept or assume no responsibility
and deny any liability to any party other than Contact Energy Limited for our
work, for this independent limited assurance report, or for the conclusions
we have reached.
We acknowledge a copy of our limited assurance report is included in
Contact Energy Limited’s Annual Report for information purposes only.
Management’s responsibility for the GRI indicators
Management of the company are responsible for the preparation and fair
presentation of the GRI disclosures in all material respects in accordance
with the GRI standards, and the information and assertions contained within
the Annual Report. This responsibility includes such internal control as
Management determine is necessary to enable the preparation of the GRI
Disclosures that is free from material misstatement and non-compliance
whether due to fraud or error.
Our responsibility
Our responsibility is to express a conclusion to the directors on whether
anything has come to our attention that the GRI disclosures of Contact
Energy Limited have not, in all material respects, been prepared in
accordance with the GRI standards for the year ending 30 June 2022.
Contact INTEGRATED REPORT 2022
Procedures performed
A limited assurance engagement consists of making inquiries, primarily
of persons responsible for the preparation of information presented in
the GRI disclosures, and applying analytical and other evidence gathering
procedures, as appropriate. These procedures included:
• Inquiries of management to gain an understanding of Contact Energy
Limited’s processes for determining the material issues for Contact Energy
Limited’s key stakeholder groups;
• Interviews with senior management and relevant staff concerning
sustainability strategy and policies for material issues, and the
implementation of these across the business;
• Interviews with relevant staff responsible for providing the information
in the GRI disclosures;
• Comparing the information presented in the GRI disclosures to
corresponding information in the relevant underlying sources to determine
whether all the relevant information contained in such underlying sources
has been included in the GRI disclosures; and
• Reading the information presented in the GRI disclosures to determine
whether it is in line with our overall knowledge of, and experience with,
the sustainability performance of Contact Energy Limited.
The procedures performed in a limited assurance engagement vary in
nature and timing from, and are less in extent than for, a reasonable
assurance engagement, and consequently the level of assurance obtained
in a limited assurance engagement is substantially lower than the assurance
that would have been obtained has a reasonable assurance engagement
been performed.
Due to the inherent limitations of any internal control structure it is
possible that errors or irregularities in the information presented in the
GRI disclosures may occur and not be detected. Our engagement is
not designed to detect all weaknesses in the internal controls over the
preparation and presentation of the GRI disclosures, as the engagement has
not been performed continuously throughout the period and the procedures
performed were undertaken on a test basis.
Our independence and quality control
We have complied with the independence and other ethical requirements
of Professional and Ethical Standard 1 International Code of Ethics for
Assurance Practitioners (Including International Independence Standards)
(New Zealand) issued by the New Zealand Auditing and Assurance Standards
Board, which is founded on fundamental principles of integrity, objectivity,
professional competence and due care, confidentiality and professional
behaviour.
The firm applies Professional and Ethical Standard 3 (Amended) and
accordingly maintains a comprehensive system of quality control including
documented policies and procedures regarding compliance with ethical
requirements, professional standards and applicable legal and regulatory
requirements.
Our firm has provided services to Contact Energy Limited in relation to
statutory audit, trustee reporting and other assurance for Greenhouse gas
emissions reporting, Green Borrowings Programme reporting and Global
Initiative Reporting. Subject to certain restrictions, partners and employees
of our firm may also deal with the Contact Energy Limited on normal terms
within the ordinary course of trading activities of the business of the Contact
Energy Limited. These matters have not impaired our independence as
assurance providers of Contact Energy Limited for this engagement.
The firm has no other relationship with, or interest in, Contact Energy Limited.
The partner on the engagement resulting in this Combined Independent
Auditor’s and Limited Assurance Report is Sonia Isaac.
Sonia Isaac
KPMG
Wellington
12 August 2022
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FY22 SUMMARY
WHO WE ARE
CREATING
VALUE
STRATEGIC
THEMES
STRATEGIC
ENABLERS
GOVERNANCE
MATTERS
ADDITIONAL
DISCLOSURES
FINANCIAL
STATEMENTS
130
Contact INTEGRATED REPORT 2022
Contact
INTEGRATED
REPORT
2022
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Corporate directory
Board of Directors
Robert McDonald (Chair)
Victoria Crone
Sandra Dodds
Jon Macdonald
David Smol
Rukumoana Schaafhausen
Elena Trout
Leadership team
Mike Fuge
Chief Executive Officer
Chris Abbott
Chief Corporate Affairs Officer
Jack Ariel
Major Projects Director
Jan Bibby
Chief People and Transformation Officer
Matt Bolton
Chief Retail Officer
John Clark
Chief Generation Officer
Dorian Devers
Chief Financial Officer
Iain Gauld
Chief Information Officer
Jacqui Nelson
Chief Development Officer
Tighe Wall
Chief Digital Officer
Registered office
Contact Energy Limited
Harbour City Tower
29 Brandon Street
Wellington 6011
New Zealand
T +64 4 499 4001
Find us on Facebook, Twitter, LinkedIn and
YouTube by searching for Contact Energy
Company secretary
Kirsten Clayton
General Counsel and Company Secretary
Company numbers
NZ Incorporation 660760
ABN 68 080 480 477
Auditor
KPMG
PO Box 996
Wellington 6140
Utilities Disputes 0800 223 340
If you live around one of our power
stations or offices and want to
get in touch, give us a shout on
0800 000 458 (North Island) or
0800 66 33 35 (South Island).
Registry
Change of address, payment instructions
and investment portfolios can be viewed
and updated online:
investorcentre.linkmarketservices.co.nz
investorcentre.linkmarketservices.com.au
New Zealand Registry
Link Market Services Limited
PO Box 91976, Auckland 1142
Level 30, PWC Tower
15 Customs Street West
Auckland, 1010
contactenergy@linkmarketservices.co.nz
T + 64 9 375 5998
Australian Registry
Link Market Services Limited,
Locked Bag A14, Sydney
South, NSW 1235
680 George Street, Sydney, NSW 2000
contactenergy@linkmarketservices.com.au
T +61 2 8280 7111
Investor relations enquiries
Matthew Forbes
GM Corporate Finance
investor.centre@contactenergy.co.nz
Sustainability enquiries
Taria Tahana
Head of Sustainability
sustainability@contact.co.nz
contact.co.nz
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