AGY-6916 | Networks NSW

Full description

Networks NSW (NNSW) was a shared group management model established on 1 July 2012 as part of the NSW Government's program of reform of its electricity networks. (1) NNSW comprised the three distribution network service providers (DNSPs), Ausgrid, Endeavour Energy and Essential Energy, and was designed to deliver efficiencies and cost savings across these businesses. (2)

Under Networks NSW, the three DNSPs, which were State Owned Corporations, continued to operate as separate legal entities. The model commenced with the entities having separate boards but with common directors, a common chairman and common chief executive officer. (3) However, the Energy Services Corporations Amendment (Distributor Efficiency) Act 2013 (4), which commenced on 27 August 2013 (5), provided for a single board of directors (the 'joint board') that was to be the board of each of the energy distributors as if they formed part of a combined operation. (6)

An Umbrella Cooperation Agreement (UCA), facilitated collaboration between the DNSPs enabling them to identify and implement reform and other efficiency measures by acting collectively. (7) Further to the UCA, the three organisations entered into a joint venture agreement to achieve savings in purchasing and service provision activities. (8)

NNSW was unincorporated so a legal entity, Networks NSW Pty Ltd, was established to act as agent for the joint venture. This company conducted the request-for-tender process and negotiated the terms of the contracts on behalf of the NNSW participants. (9)

In June 2015, the Electricity Network Assets (Authorised Transactions) Act 2015 was enacted. Under Schedule 7 of this Act, on a date to be notified by the Treasurer, the joint board would cease to exist and would become instead the board of Essential Energy. (10) From 1 July 2015, the three DNSPs began transitioning back to stand-alone businesses in relation to strategy, policy and reform initiatives and, pursuant to a Ministerial Order, the joint board was dissolved on 31 December 2015. (11) The DNSPs agreed to terminate all cooperative arrangements effective from that date. (12)

On 29 January 2016, Networks NSW Pty Ltd became a wholly owned subsidiary of Essential Energy. It was de-registered in August that year. (13)

Endnotes
1. Ausgrid Annual Report 2012-13, p.6.
2. Endeavour Energy Annual Report 2014-15, p.68.
3. Loc.cit
4. Energy Services Corporations Amendment (Distributor Efficiency) Act (Act No.33, 2013), s.9A.
5. Energy Services Corporations Amendment (Distributor Efficiency) Act 2013 Commencement Proclamation (2013 No 445); notified on NSW Legislation website, 23 August 2013.
6. Energy Services Corporations Amendment (Distributor Efficiency) Act (Act No.33, 2013), s.9A.
7. Essential Energy Annual Report 2015-16, p.73.
8. Endeavour Energy Annual Report 2012-13, p.68.
9. Networks NSW Joint Venture E-Tendering, Tenderlink website, http://www.tenderlink.com/tenderers/2744.606/searchpages/index.htm (accessed 13 December 2016).
10. Electricity Network Assets (Authorised Transactions) Act (Act No.5, 2015), Sch.7, cl.7(1).
11. Essential Energy Annual Report 2015-16, p.26.
12. Ausgrid Annual Report 2015-16, p.52.
13. Essential Energy Annual Report 2015-16, p.73.