History of the Company
Envestra’s origins date back more than 140 years through the gas distribution networks of the former South Australian and Brisbane Gas Companies, and the Gas and Fuel Corporation of Victoria. In 1997 Envestra was formed when it acquired the natural gas distribution and transmission networks in South Australia, Queensland (north of the Brisbane River) and the Northern Territory. In 1999 the Company acquired a further natural gas distribution business, in Victoria.
Envestra’s Operations
As Australia’s largest distributor of natural gas, Envestra holds a key position in the nation’s fastest growing energy sector.
Envestra owns in around 21,000 kilometres of natural gas distribution mains and 1,000 kilometres of transmission pipelines delivering natural gas to around one million homes and businesses. Each year over 20,000 new consumers are connected to Envestra’s distribution networks.
The Company generates revenue by charging energy retailers for transporting natural gas through its distribution networks and transmission pipelines to their customers.
On 2 July 2007, the contract to operate and manage the Company’s distribution networks and transmission pipelines throughout Australia was transferred to APA Asset Management.
Currently natural gas represents around 18% of Australia’s primary energy consumption, however, the Australian Bureau of Resource Economics predicts that by 2020, around 24% of Australia’s energy requirements will be met by this environment friendly fuel.
The Gas Industry
The natural gas industry comprises four sectors, of which Envestra is involved in the transmission and distribution sectors.
Exploration and production companies locate and process the gas. It is then sent via high pressure, large diameter and long distance pipelines (known as transmission pipelines) to capital and regional centres around Australia.
At this point the gas enters local distribution networks where it is delivered to consumers, who are charged for the gas they use by their energy retailer.
Through the introduction of Competition Legislation gas markets around Australia have become ‘contestable’. This has resulted in the disaggregation of previously bundled utility businesses into energy distributors and retailers.
Simultaneously, retailers have, through contestability, gained access to both gas and electricity, driving a major change in focus in the energy industry.
Independent Regulators in each state ensure the interests of consumers and asset owners are addressed.
This involvement by government-appointed Regulators means that once an Access Arrangement determination is made, usually for five years, Envestra has considerable confidence about the revenue it will generate over this future period. The Access Arrangements set out the terms, conditions and tariffs to be applied to retailers when they use the Company’s distribution networks.
Environmental Benefits of Natural Gas
Natural gas delivers numerous benefits to the environment.
Power stations fuelled by natural gas are far cleaner than those burning coal. This is because the carbon dioxide emissions produced by coal in generating electricity are almost 80 percent higher than for natural gas. Brown coal emissions are higher again.
Additionally, research commissioned by the Australian Gas Association in 2000 found that in the residential sector, greenhouse gas emissions from a natural gas space heater equate to one third of the emissions produced through heating powered by black coal-generated electricity. Furthermore, the emissions from natural gas water heating are much lower than those from electric water heating.
Envestra has played a key role in promoting the use of natural gas as a vehicle fuel, particularly in place of conventional diesel engines. Using natural gas in preference to diesel has improved air quality, and substantially reduced noise pollution and greenhouse gas emissions. In Brisbane and Adelaide metropolitan bus and Council fleets, as well as a number of private organisations’ forklifts and vehicles operate on natural gas.
Undertaking R&D in Gas Appliances
Envestra supports the improvement in safety and technology associated with natural gas appliances through such bodies as the Australian Standards Association. The Company is represented on Code Committees for appliances and installation.
Additionally, Envestra is a member of the Gas Appliance Manufacturers Association which represents natural gas and LPG appliance manufacturers, importers and agents. Through this involvement the Company encourages appliance research and development, with the aim of increasing appliance efficiency.
Envestra also supports energy efficiency projects such as 5 Star Housing, incorporating gas boosted solar hot water systems, as it reduces consumer costs and enhances the competitive position of natural gas.
Promotion of Natural Gas
Envestra markets the benefits and applications of natural gas for both the residential and small-medium industrial and commercial market segments through television and general advertising, promotion and incentives. Over 95% of new homes constructed in South Australia and Victoria, where natural gas available, are connected to Envestra’s distribution networks.
Natural Gas Network Extensions
Envestra continues to expand its natural gas distribution infrastructure throughout Australia to keep pace with urban sprawl and geographic development.
Each year the Company spends around $80 million expanding its natural gas networks, connecting new customers and improving supplies in South Australia, Victoria, New South Wales, Queensland and the Northern Territory.
Environmental & Sustainable Work Practices
Envestra, through APA, is committed to sound management of quality, health, safety and environmental issues associated with the activities of the Company.
Quality Management System
APA, has introduced an ISO9000 Quality Management System (QEC 7070) to ensure the activities performed by the business conform to legislative requirements, set benchmarks for industry best practice and meet or exceed the expectations of customers, stakeholders and members of the public. Regular compliance auditing of the business demonstrates that field activities are well managed, adaptable to change and undergo continuous improvement.
Health Safety and Environmental Management
Envestra maintains its commitment to occupational health, safety and the environment by continuously monitoring the performance by its contractor, APA, and its subcontractors, in these areas.
Envestra's and APA’s commitment is reflected in APA’s Health Safety and Environment Policy which is supported by comprehensive Standards and Codes of Practice. These standards and codes are integrated into APA’s work practices in relation to the construction of gas mains and services, as well as in the HSE Management System (HSEMS).
The organisation’s commitment to HSE emphasises:
- Identification and management of risks outside the organisation’s control;
- Elimination of hazards and risks within the organisation’s control;
- Assisting employees to meet HSE obligations; and
- Undertaking activities with consideration for economic constraints, environmental management and community expectations.
The HSEMS is an integrated process that incorporates all aspects of HSE management into all levels of APA. The major features of the HSEMS are:
Occupational Health, Safety and Environmental management considerations are covered in a single comprehensive system;
- Applies to all levels of the organisation and to all working conditions;
- Is a documented system with hierarchical structure; and
- Operates as a closed loop system that locks in compliance requirements and resulting changes to ensure continuous improvement of the management system and operational outcomes.
Health, safety and environmental performance is continuously monitored and reported through a range of programs and statistical performance measures. Such programs include reporting and investigating all health, safety and environmental incidents, field compliance monitoring, audits of procedures and inspections of necessary health safety and environmental risk controls, and reporting on outcomes of both health and safety and environmental emergency response exercises. This information is conveyed to Envestra’s management on a monthly basis and to its Board at each meeting.
Envestra closely monitors APA ’s safety performance through the following measures:
- Serious Injury Frequency Rate (SIFR) (Total of Lost Time and Moderate Injuries);
- Lost Time Injuries (LTI) (requires more than a day off work);
- Moderate Medical Injuries (MMI) (requires less than a day off work); and
- Minor Injuries (able to return to duties).
In 2008/09 the following Injuries were sustained:
| APA AM | Contractors | |
| SIFR | 10.6 | 10.6 |
| LTI | 9 | 7 |
| MMI | 1 | 5 |
| MI | 14 | 32 |
During 2008/09 APA conducted 170 safety and environmental audits and completed 11 emergency response exercises. This performance was in line with the program submitted to Envestra at the commencement of the year.
During 2008/09 APA conducted three environmental audits and completed eight environmental response exercises. No major environmental concerns were identified through both activities.
Environmental Management Program
APA, as contractor to Envestra, has developed and implemented an Environmental Management Program that is based on the requirements of ISO14001:1996. The promotion of environmental awareness and responsibility to employees and contractors through company policies and procedures is considered critical to good operational practice and ultimately generates costs savings from continued improvement in performance.
Operations Conducted Responsibly
The range of activities undertaken by Envestra which promote environmental responsibility and minimise the disturbance caused by the installation of gas mains and services on the surrounding environment and vegetation are:
Job Impact Statement for all work conducted by field crews;
- HSE Management Plans developed for all major projects;
- Common trenching with other utilities to minimise disturbance;
- Directional boring to prevent damage to the root systems of trees located in nature strips and minimises disturbance to the surrounding environment;
- Leakage surveys conducted on regular programmed basis;
- Traffic management and control;
- Continual training and competency assessments;
- Long-life materials used for all gas assets to minimise disturbance from maintenance activities; and
- High standards for the clean-up of worksites to ensure that they are reinstated to near or better than original condition.
Envestra also adopts measures to control the potential discharges to the environment from its activities. These measures have been incorporated into gas mains and services operating procedures, and include:
Accelerated mains replacement project to upgrade and replace older cast iron mains in order to minimise leakage. More than 2,000 kilometres of mains have been replaced over the past ten years;
- Purging operations kept to a minimum, and where necessary, flaring is used to minimise the impact on the environment;
- Stockpiles of dirt from excavations are stored in a manner that minimises soil erosion and run-off into storm water systems;
- Sediment pollution traps and filters are used to minimise wastewater and sediment run-off into storm water systems;
- All wastes are disposed of at licensed landfill sites including disposal of hazardous materials e.g. ‘old’ asbestos cement meter boxes; and
- Waste reduction, re-use and recycling practices are promoted at all worksites and offices.
External Accreditation
APA is accredited by Esso Australia to perform critical activities associated with oil and gas pipelines. This accreditation demonstrates that Envestra’s contractor has in place the necessary quality and HSE management systems and practices to conform to an established worldwide framework for managing HSE risks within the oil and gas industry.
Safety Cases
A comprehensive Safety Case governs each transmission and distribution network owned by Envestra and managed by APA. These Safety Cases, which are approved by the Technical Regulator in each State, identify management responsibilities and the application of safe operational and facility management through strategic planning, workplace consultation and a systems approach to work practices and procedures.
In this way, the Safety Cases provide for the safe operation of Envestra’s pipeline facilities in accordance with HSE best practice and license and regulatory requirements.
Key objectives of the Safety Cases for Envestra’s gas distribution and transmission assets are to ensure that:
A strong focus on safety is maintained;
- All risks are identified and effectively managed;
- Relevant information is communicated to those in need;
- Ongoing training and development to ensure required competencies are maintained;
- Adequate monitoring and controls are in place for gas pressure, quality and odorant to ensure safety levels are maintained; and
- Gas incident and emergency preparedness is maintained and tested to meet all probable eventualities.
Remediation Works
APA is contracted to manage three Envestra owned sites that contain contaminated soil from gas manufacturing processes that cesased around 40 years ago.
In addition, APA manages the site formerly used by The Albury Gas Company to manufacture gas. The site was sold to the local council in 1985.
The approach to managing these sites is to minimise harm to the environment from the contamination.
Site specific management plans, including continual monitoring and strategic remediation activities are being developed and implemented in conjunction with the relevant environmental authorities. The health and safety of workers operating on these sites is also integral to the site management plan.
Envestra’s site specific management plans include annual groundwater monitoring, specific remediation activities for soil and groundwater, review and analysis of data collected and annual review/update of the site management plans. The annual review of site management plans incorporate new site data to ensure the plans comply with any changes to the regulatory environment. Detailed, external audits are conducted on the plans to ensure their robustness.
Envestra’s Code of Conduct
Envestra’s Code of Conduct was developed through consultation with Directors, management and employees of Envestra. The Company recognises that its success will be determined by the manner in which its Directors and employees comply with all legal and prudential requirements, in both the letter and spirit of the law.
To read Envestra's Code of Conduct click here.
Envestra’s Employees
Envestra and APA strive to provide and maintain a satisfying and rewarding working environment for employees.
Employees are provided with training considered mandatory to undertake their role and are encouraged to take advantage of other company sponsored training programs. The organisations also facilitate the professional and academic development of staff through the provision of educational assistance funding, study leave to attend classes and exams, and subsidies for books and learning materials.
Statistics collated on employee absenteeism, in terms of available work days taken as sick leave, indicate that Envestra and APA have low rates of absenteeism.
Envestra, through APA, places priority on rehabilitation programs in the event that employees sustain work related injuries or illnesses. These programs focus on returning the employee to pre-injury duties where possible. Rehabilitation and return-to-work plans are developed to allow employees to re-enter the workplace as soon as practicable, and assist with their recovery.
Community Sponsorships
Envestra in its own right, or through APA, undertakes strategic partnerships to promote the benefits of natural gas, to build and maintain relationships, source market inteligence and generate new growth opportunities.
The principal initiatives undertaken by the Company in 2008/09 included:
Housing Industry Association
Master Builders Association
Urban Development Institute of Australia
Property Council of Australia
Plumbing Industry Association
Australian Land Development Engineers
Hotel and Restaurant Industry Association
As part of these activities, Envestra supports the training of apprentice chefs and other trainees through Hospitality Group Training. In 2008-09 the Company donated 950 natural gas cookers to 130 schools.
In addition, the Company operates a matching program for employee donations to charatable organisations.
References
- Envestra Annual Reports
- Envestra Investor Booklet
- APA Group, Internal Policies and Procedures
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Earnings Revision – Year ended 30 June, 2010
