In the end it was far too easy for the status quo to prevail. Citizens & Ratepayers simply targeted 25,000 plus supporters with a personal letter asking for a vote for all 5 candidates on their ticket. The rank and file fell into line and compiled to ensure all five Trustees are now from one political party. The lack of media interest in the election and the incredibly low turnout (less that 17%) meant that it was an impossible task for an independent, or even the other tickets, to get anywhere close.  The AECT media release announcing the election result can be read here.

The AECT website optimistically states that “Your five trustees all come from different backgrounds and each one brings a different perspective to the decisions the Trust makes.” Unfortunately the election results means that only a small number of the Trust’s 300,000 beneficiaries, who are spread across the diverse communities of Auckland, Manukau and Papakura, can claim to be represented by the elected Trustees.

It is hugely disappointing election process and outcome that leaves the unsustainable direction of the Vector unchallenged for another three years. It also allows Vector to continue on a reckless “business as usual” path without adequately responding to the current environmental challenges or tackling an unhealthy corporate culture which is leading the company to inevitable crisis. 

It will be interesting to see what the media and electricity consumers make in future of power cuts, under investment in energy infrastructure, rising energy bills, excessive Trustee fees, unsustainable dividend payments, a lack of community engagement by the Trust or any of the range of issues facing Vector and the AECT.

The AECT election has exposed how voter apathy, a paucity of information and well placed resources can distort the democratic process.  There are many lessons to be learnt as we fast approach the first super city elections if we want fresh thinking, a sustainable future and inspiring community leadership to be part of Auckland’s governance.

The AECT election has been largely ignored by the media which means very few voters are aware of the issues facing the largest publicly owned trust in New Zealand and the governance of New Zealand’s leading energy infrastructure company.

Brian Rudman is the only commentator to provide anything thought provoking about the issues, making the suggestion in the NZ Herald that voter apathy (currently only 15.73% have voted with only one day left) justified the eventual owners of the Trust, the councils of Auckland, Manukau and Papakura making a serious bid to bring forward the eventual transfer. As he pointed out the community could do a lot more with the $98 million dividend than have it spread out in $320 lots to 273,000 plus households in the Trust area.

The 16 candidates have been unchallenged on their views on a range of other issues such as undergrounding, the strategic direction of Vector, the roles of the Trustees, trustee fees, the regulatory relationship, the sale of Vector, energy pricing, energy efficiency.  Perhaps if the Trust had done more to advertise the election and the role of the Trustees, eligible voters would have demanded more information to inform their vote.

As a consequence of the minimal election coverage the governance of Vector has also escaped scrutiny. The Trust as majority shareholder of Vector needs to be satisfied that the right governance structure is in place.  Only John Collinge and his ticket of Just Power – No Politics has highlighted concerns about the current governance.

One area that raises concerns about the current Trustees oversight of Vector, on behalf of energy consumers, is the lack of a clear company strategy that is understood by all employees and a negative management culture that has stifled performance and innovation.  The Trust needs to know that Vector is delivering on its core functions as an infrastructure company. This calls for a number of tough questions by the Trustees. How well is Vector performing in terms of what customers want – the delivery of reliable and safe energy? Is there a crisis loaming due to under investment and lack of maintenance in key areas? Is there a priority on doing the job right rather than increasing dividends (out of debt) at the risk of reliability and safety? Why is business as usual at Vector about handling a higher volume of power – has this has become the de facto strategy? What is the future direction that will maximise new initiatives and opportunities?

The company strategy should be clear and simple, providing the foundation for a healthy, productive and innovative business with highly engaged staff with a clear sense of purpose and healthy morale. Unfortunately there are indications that the culture at Vector has allowed a breakdown in the trust and respect at all levels of the organisation from the executive and Board down. The Trust needs to consider whether the positive flow of respect and strategic alignment at Vector has gone wrong and whether this means the company is not working as well as it could.  The Trust has the ability to influence the strategic direction of Vector and the management culture through the appointment of directors to the Board including two of the Trustees.

The current Vector management needs to stop hiding behind being a monopoly private sector company to acknowledge its place in the community providing an essential service. This will only happen once the Trustees are willing to step up into their role and demand much more from the governance of the company.

Press Release: Grey Lynn 2030

28 October 2009

With only 2 days remaining in the AECT election a disappointing 14.65% of eligible voters have so far returned postal ballots to decide the 5 trustees of the Trust. At the same time in the 2003 election the turnout was only slightly better at 17.5%. Independent Candidate Pippa Coom, a lawyer who previously worked at Vector, visited nearly the whole Trust area over the course of her campaign and found a high level of ignorance about the Trust and very little awareness about the election.

“The election has given me the opportunity to attend community meetings all over Manukau City. It has convinced me that you can’t beat face to face communication with the beneficiaries of the Trust. I have been overwhelmed by the warm reception I have received and if elected will be heading straight back to South Auckland to start a conversation about what the community could best do with the $98m dividend”

“I feel very fortunate to have been made redundant from Vector at the beginning of the year. Without that push I would not have thrown myself into working for the transition town movement through Grey Lynn 2030 nor with the support of Grey Lynn 2030 pursued the idea to run as an independent candidate with aim of putting community into the Trust and setting a sustainable direction for Vector.” said Ms Coom

Suzanne Kendrick, steering committee member has really seen Grey Lynn 2030 grow from strength to strength in the first year of the group. “In only one year we have achieved so much through practical action in our community. We now have about 800 supporters on our contact list. The Grey Lynn Farmers Market is one of our biggest success stories. From one of our monthly meetings volunteers got together to make it happen and after 8 weeks of being open, the market is hugely popular for locals and is already running at a profit. We have other groups focusing on stream restoration, minimising waste, community gardens, traffic calming – all through a shared positive vision to make our community sustainable.” said Ms Kendrick

“If Pippa gets elected – and if the feedback I am receiving is anything to go by it is looking very likely that she will become a new trustee – it will be fantastic way to celebrate Grey Lynn 2030′s first anniversary. It will really show what can be achieved in the community when a group of people decide to make an idea a reality – after all it all comes back to us as a community, we have to appreciate how much power is in the hands of the community if people get into action” said Ms Kendrick.

 There are a number of statements and omissions that stand out from Vector’s recent operations performance summary and the claims made at the Annual meeting on Friday that highlight concerns Vector is not responding to current environmental challenges nor positioned to maximise value from the “new” economy.

 Vector’s traditional business approach has been to focus on increasing electricity and gas volumes and the number of new connections. It is convenient therefore to claim that current “soft” economic conditions are the big challenge ahead for the company while ignoring the impact of climate change, consumer demand for distributed renewable energy (which will lead to more potential customers using less traditional grid power and more home or street produced power traded via a smart grid) and the push to encourage energy efficiencies. These factors are now a constant for Vector to respond to regardless of a warmer than average August or the non-emergence of economic green shoots.

Vector is still silent about energy efficiency opportunities such as solar hot water. Nova Energy meanwhile has gone to market with a pay-on-your-bill in monthly instalments offer to consumers in the Auckland region. Vector, the largest lines company in New Zealand, operates two ripple control systems in both North Shore City and Central Auckland. Ripple control systems turn off householder’s hot water cylinders at peak times to lower or ‘shave’ peak loads. Joining the dots it should be Vector leading the charge in this area. Hot water control has always been a core part of the business but should now be positioned as a clear commitment to energy efficiency as part of the new business.

What the Trust, as the majority shareholder, needs to hear from Vector is how the company intends to actively invest and/or support market solutions that play a role in solutions for climate change for example solar, smart grid solutions, distributed renewable energy. At the moment Vector appears to be feigning a commercial interest to appease the regulator rather than acting through geniune commitment.

 The Trust should also be interested to hear how Vector is growing other areas of the company as well as adequately investing in the core business. The ambition is there to develop a high-speed fibre network but to date the performance of Vector Communications Limited has been disappointing and the subsidiary has failed to leverage off access to an extensive the electricity infrastructure.

 The claims by the Chairman that substantial costs savings have been made from efficiencies in this current financial year are not necessarily grounds for congratulations. Shareholders have enjoyed a healthy dividend this year ($98m) but this needs to be balanced with reassurance that Vector is making necessary capital expenditure to ensure reliable and safe supply. These cost savings have also been achieved by cutting back in the very areas of the business where investment is most needed. For example over the last year Vector has quietly disbanded its team working on renewable energy and restructured the Vector communications business into the commercial team thereby taking away its market prominence.

It is essential that the next operations performance summary provides a much more convincing account of how Vector is not just waiting for cold weather to improve performance but is leading the way in responding to and adding value from emerging  environmental opportunities.