department of finance workshop with private sector merger implementation group 16 july 2013 merger...
TRANSCRIPT
Department of Finance
Workshop with private sector
Merger Implementation Group
16 July 2013
Merger of Synergy and Verve Energy
Merger Implementation Group
Background
Premier announced the merger of Synergy and Verve Energy on 10 April 2013
o Integrated into single entity with two ring fenced business units for generation and retail
o Merged entity to be called Synergyo Merger to happen by 1 January 2014o Common board established by 1 July 2013
Merger Implementation Group
Merger Implementation Group
Merger Implementation Group formedo Peter Oates (Chair)o David Hunto Ray Challen
Role of the Merger Implementation Groupo What is our role?o What is not our role?
Merger Implementation Group
Merger objectives
Stream 1: To establish a new Synergy by 1 January 2014, consistent with the following objectives:
o Cost savingso Sustaining private sector participationo Security and reliability of supply
Stream 2: Develop a position paper on the impact of the merger on the Wholesale Electricity Market
Merger Implementation Group
Today’s outcomes
Establish common understanding of issues identified by private sector
Listen to private sector views on potential solutions and/or mitigants to these issues
Merger Implementation Group
Stakeholders
Engaging with a wide range of stakeholders over the course of the merger
WA government agencies
ACCC
ERA
IMO
Common board of the corporations
Existing energy market participants
Industry
Retail customers
Employees
Unions
Merger Implementation Group
Project governance
Merger Implementation Group (Chair + 2
Members)
SSO
Regulatory Bodies
Counterparties
Other stakeholders
Project Office(Project Director + 5
FTEs)
Legal
Corporate Restructuring
Advisors
Minister for EnergyTreasury
Chairman Common Board
CEO (S), CEO (V)
IndustryUnions
Project Manager/s
Verve Synergy
Project Governance
Project Communications
Legal and Legislative
Change
Transaction Design
Electricity Market
Other
Benefits Realisation
Verve Steering Committee
Synergy Steering
Committee
• Operations
• Environmental Management
• Energy Procurement
• Fuel Procurement
• Pricing, Sales & Trading
• Strategy & Business Development
• Ring fencing
• ICT
• Legal
• Non-Energy Procurement & Facilities
• Records & Information
• Organisational Design
• Communication
• HR/IR
• Finance & Treasury
• Billing & Customer Care
• Marketing
• Pricing, Sales & Trading
• Ring fencing
• Fuel Procurement
• Energy Procurement
• Strategy & Business Development
Generation Corporate Shared Services Retail
Merger Implementation Group
Process going forward
Merger related activities broadly categorised as:o Consultationo Legislationo Regulationo Integration of Synergy and Verve Energy
Timing
Engaging with the merger team
Merger Implementation Group
Legislation vs. regulation Two stages – legislation and regulations Legislation
o Will address the mechanics of the mergero Primarily consists of amendments to the Electricity Corporations
Act 2005o Drafting instructions are being finalised
Regulationso Any ring-fencing measures will be set out in the regulations, or
Ministerial orders/directions made under the Act or regulationso The regulations are still being developed – stakeholder input is
being sought in advance of detailed drafting
Merger Implementation Group
Existing contracts will be honoured
Subject to legislation Synergy and Verve Energy will merge into a single entity
Parts of the merged entity will be ring-fenced
Key elements of the merger
Merger Implementation Group
Merger Contacts
Peter Oateso Email: [email protected] Mobile: 0414 690 341
Ray Challen o Email: [email protected] o Mobile: 0408 321 262
Simon Middleton o Email: [email protected] o Mobile: 0409 581 482
Merger Implementation Group
Questions
Merger Implementation Group
Discussion topics
Ring fencing
Transfer pricing
Role of the private sector in the WEM