Alpine Energy reshuffles its lines business responsibility

Friday, 25 August 2023

Alpine Energy has confirmed a rearrangement of its lines business with news it will combine with Netcon, the electrical contracting company it owns.

Alpine Energy chief executive Caroline Ovenstone released a short statement confirming the “combining” of the two entities on Thursday evening.

The change comes five years after Alpine Energy turned Netcon into an independent electrical contracting company but retained 100% ownership.

Ovenstone said the move was “strategic” and would help prepare for the growth expected in the lines network and the “resilience needed in the face of ever-increasing weather events”.

“It is time to streamline our operations, share our expertise and develop the capabilities we need to future-ready our network and business to meet our customers’ growth needs,” Ovenstone said.

It was not known whether the move would result in any job losses, when the two would combine, or what the single entity would be known as.

Ovenstone declined to answer any of The Timaru Herald’s questions following the announcement, saying she was unavailable to comment and was “satisfied with the statement as it stands”.

Alpine Energy was jointly owned by Timaru District Holdings Limited (47.5%), Waimate District Council (7.54%), Mackenzie District Council (4.96%) and LinesTrust South Canterbury (40%).

Ovenstone said the company had experienced a significant increase in the demand to connect to the electricity network, driven by decarbonisation, economic growth, a rise in EVs in the region and large-scale solar farm applications.

She said the company expected to increase the investment in its networks upwards of 150% in the next 10 years and combining the companies would simplify operations, unlock efficiencies and position the business to meet future demands.

Alpine Energy’s restructure, which made Netcon an independent contracting company, occurred in 2018.

At the time, Netcon acting chief executive officer Andrew Tombs said as part of the restructure some roles were disestablished, but no staff were made redundant.

Later that year, a public petition was launched to fight Timaru District Holdings Limited’s proposal to sell its 47.5% shareholding in Alpine Energy.

Following a public consultation, the Timaru District Council overwhelmingly rejected the proposal.

The latest announcement followed the release of Alpine Energy’s 2022-2023 annual report which revealed a network lines revenue of $56.7m ($53m in 2021-2022) and its highest ever customer contribution and connection fees revenue of $7.9m.

Alpine Energy had 179 employees (full time equivalents) and the Netcon team is made up of 89 employees.

The annual report said Netcon had faced “significant challenges” during the past year, particularly relating to “supply chain disruptions and the continued rise of inflation”.

“The shortages of raw materials, shipping delays, and logistical bottlenecks impacted operations, resulting in increased costs, delays, and difficulties in meeting customer requirements,” the report said.

“The talent shortage across our businesses, and especially within our Power Services Limited business, further exacerbated the challenges.

“Filling vacant roles across the Netcon Group became a struggle, hindering our ability to effectively grow our revenue, particularly in relation to recent acquisitions.”

In the report, Netcon chief executive Pete Theron said: “The year was tough, but we feel that we have made many improvements that have set us up for a much-improved 2023/24.”

The report revealed Netcon made a $466,000 after-tax loss in 2022/23 compared to a $546,000 profit the previous year.

According to the report, High Country Electrical had been added to the Netcon Group, which expanded its capabilities in the electrical sector.

“This acquisition will provide new opportunities and synergies for our business moving forward.

“We also increased our leadership capability with the establishment of the operations manager role.”

Responding to questions put to him by The Timaru Herald about a possible rebrand of Netcon back in June, Theron said there were no plans in place, but he did not rule it out.

“It may be something we consider in the future, but no decision has been made at this stage.”