PDF A Northern Ireland company working for consumers

A Northern Ireland company working for consumers

2017

ANNUAL REPORT AND ACCOUNTS

A Northern Ireland company working for consumers

Contents

05 Chairman's statement 07 StrategCichraeirpmoratn's statement

07

Our strategy and business model

08

Business structure

10

Strategic objectives

11

Key performance indicators

12

Business performance

23

Risk management

26 Corporate governance report 26 Board of directors 28 Corporate governance statement 33 Directors' remuneration report 45 Risk committee report 46 Audit committee report 50 Members

57 Mutual Energy Limited annual report and financial statements

A Northern Ireland company working for consumers

.................................................................................................................................................................................

Regina Finn, Chairman

2017 saw significant progress ? both on our flagship projects and on the efficient management and running of our core business.

Along with our partners, SGN, we celebrated an important milestone in our high profile project to deliver gas to the west of Northern Ireland when the Maydown site, which feeds Strabane, became fully operational in mid-January 2017. The rest of this strategically critical project is also progressing well with designs agreed, planning submitted and approved and key contracts placed. The project is on track to deliver gas to the main leg of the development in late 2018, and by bringing gas to 7 towns in the west of Northern Ireland, will help support economic growth and business as well as giving retail customers important choice and diversity of energy sources.

Just as important was the completion of the project to replace the Moyle Interconnector return cables. The project, which had considerable engineering, commercial and management challenges, was completed on time and well within budget. We are proud that with over 250,000 man hours worked there were no lost time accidents, reflecting our strong commitment to health and safety.

Whilst these high profile projects have been clearly visible, they could not have been successfully progressed without an unrelenting focus on delivering our core business to the highest standards. Our business model involves working closely with our partners who provide much of our operational resource, and we renewed or extended many of our critical contracts during the year including Moyle's long-term maintenance agreement (LTMA), the gas businesses' maintenance and emergency response contract (MERC) and our group audit and tax contracts. Because ensuring the health and resilience of our assets is critical to our core business, we were pleased to complete the submarine surveys of our assets during the year. We also successfully installed a new boiler house at Belfast Gas' Torytown site.

5 Chairman's statement

Energy markets around the world are changing in response to developments such as increased penetration of renewable generation and the development of distributed generation and our market is no exception. This is affecting how electricity networks are used and how they can recover their costs. We have sought out new opportunities in this changing environment and have successfully concluded new agreements for services to the grid, such as providing flexibility and capacity. This increases our revenue stream from these types of services and will ultimately reduce the income that will need to be recovered from consumers. The final payments from our insurers in connection with the low voltage cable faults on the Moyle cable were also received during the year and this too contributes towards keeping down the amount we need to collect from consumers.

There are more changes ahead driven by: the need to comply with EU rules; the requirements to develop the new all-island electricity market (I-SEM); and the Northern Ireland regulator's requirement for a single Gas Market Operator (GMO) to be established. This places considerable new demands on the business and we are pleased that the team's hard work has resulted in the gas business meeting all of its October 2016 compliance deadlines, as well as making good progress towards the establishment of the GMO that is due to commence operation in October 2017. We continue to work with stakeholders to influence the design of the I-SEM to protect our business position and as a result, the interests of Northern Ireland electricity consumers.

With so much good progress during the year we were very disappointed to experience a further Moyle cable fault in February 2017. The fault is of a different nature to the previous faults, occurring in the vicinity of a joint on the high voltage cable, rather than in the low voltage cables which were the source of the previous faults. Although different in nature, we were able to use our considerable expertise gained from the previous faults to rapidly put in place a repair plan. The first phase of these works - the de-burying and cutting of the cable ? was successfully completed in May 2017. Our aim is to complete the repair and restore the cable to full capacity by Autumn 2017.

The hard work and commitment of the Mutual team ? both on the high profile projects and on the core business ? has continued to impress me, and my Board colleagues, throughout the year. I am grateful also for the vigilance and dedication of our members as they hold the business to account for delivering for Northern Ireland consumers. I would like to thank our partners and contractors, our wider stakeholders including the teams at the Regulator and Department of the Economy, and my Board colleagues for their continued commitment and support. I want to note in particular the outstanding contribution of Stephen Kirkpatrick, Non-Executive Director and Chair of our Audit Committee, who left in September 2016 after a highly successful two terms on the Board.

Regina Finn

26 June 2017

6 Chairman's statement

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download