Vector Annual Report 2023

Regulated networks

Investment this year has included the highest-ever financial outlay on major capital works to support system growth, integrity and reliability. It also includes strong progress on the deployment of an Advanced Distribution Management System (ADMS), to provide a modern, flexible system for use on our electricity and gas networks. We worked with AWS to deploy the ADMS platform using AWS Outposts, to combine the benefits of cloud and on-premises deployment. This significant technical achievement was also followed, after the end of the financial year, by the successful migration of network SCADA control to the new ADMS platform. This has modernised the tools available to our control room staff and improved safety and asset protection. We’re also now well set up to leverage the new technology to deliver improvements to our customers, in areas such as fault location isolation and service restoration. Storm impacts and climate resilience Most Aucklanders have felt the effects of the ongoing wet weather but for some it has been devastating and life changing. In the space of just two weeks, Auckland was battered by major flooding and then Cyclone Gabrielle, the largest event we can recall, with the cyclone lasting three days. Both of these events had dramatic impacts on our customers, with some enduring extended power outages owing to the level of damage sustained on the network. Our crews worked hard and tirelessly to restore power as quickly and safely as possible, with more than 1,000 people working on the response including Vector staff, our Field Service Providers, and other crews flown in from Australia. We’re proud of how our field crews responded to these catastrophic events in such tough conditions, and as a business we’ve worked hard to review our processes and learn from them, so that we can identify any and all opportunities to improve customer outcomes in the next weather event.

Revenue Revenue increased 8.6% to $902.9 million, driven by the higher recovery of pass-through and recoverable costs and an increase in capital contributions, up 24.6% to $187.3 million, reflecting continued connection growth and the introduction of a development contribution. Continued electricity connection growth New electricity connections increased to 15,865 from 13,538 in the prior year. We also added 2,691 new gas connections from 3,146 a year earlier. Total electricity connections stood at 612,909, up 2.1% from 600,112 a year earlier, while total gas connections were 119,631, up 1.4% from 117,995 a year ago.

Volumes Volumes transported across the electricity network increased 2.3% to 8,552 GWh from 8,361 GWh a year earlier, driven by increasing business volumes, with residential volumes largely flat. Auckland gas distribution volumes were up 3.8% at 13.6 PJ from 13.1 PJ a year earlier. Increased investment levels Gross regulated capital expenditure (capex) increased by 27.3% to $422.6 million compared to $331.9 million a year earlier. This comprises $210.4 million on system growth and $212.2 million on asset replacement. Capex net of capital contributions was 29.6% higher than the prior year at $235.3 million. Capex continues to be at historically high levels due to investment to improve the reliability and resilience of our network, as well as higher growth capex reflecting the continued rise in connections and infrastructure projects.

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