Kevin GaitskellGeneral Manager ESP

The Perfect Storm

Focus

• Who are we?• In what context do we operate?• What challenges do we face?• What is our response?

…..and therefore why are we in a perfect storm?

Who are we?

• One of the worlds largest isolated power systems

• Australia’s largest combined Transmission and Distribution business

• Government Trading Enterprise (GTE)

• Operating in an immature regulated environment (2006)

…. operating from the worlds most isolated capital city

Who are we?

• Network• South West Interconnected System (SWIS)• 95,000km power lines• 787,000 power poles and towers• 224,000 street lights• 13,500 substations• 22,000 new connections

• People• 3000 employees• 500 embedded contractors• 1000+ Fee for Service contractors

With challenges associated to an aging infrastructure.

In what context do we operate?

-6

-4

-2

0

2

4

6

2007 2008 2009 2010 2011 2012 2013

Western Australia

Australia

United Kingdon0

GD

P %

Ch

ang

e (y

oy)

In what context do we operate?

forecast

AA1 AA2 AA3

Total Expenditure

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

2,000

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Aus

$ m

illio

ns (

real

201

1/2

012

)

actuals Trendforecast

What challenges do we face?

• Labour market

• Organisation

• Shareholder value

Labour market #1

Real skills crisis is still to comeEmployers warn

that Australia is

in the grip of

skills crisis

We are running

out of skilled

workersWA Businesses

hit hard by

skills

shortage

Chronic skills shortage hits workforce

Labour market #2

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

1,600,000

1,800,000

2012 2014 2017 2020

Labour gap

Labour stock

20,0

00

80,0

00 150,

000 21

0,00

0

Organisation #1

• An aging workforce:

• 10% of line workers expected to retire in 2011/12

• Current turn over 9.5%

• 14.5% leave within 2yrs

…why are they leaving?

0%

2%

4%

6%

8%

10%

12%

14%

16%

Apr-09

May

-09

Jun-0

9

Jul-0

9

Aug-09

Sep-0

9

Oct-0

9

Nov-09

Dec-0

9

Jan-1

0

Feb-1

0

Mar

-10

Apr-10

May

-10

Jun-1

0

Jul-1

0

Aug-10

Sep-1

0

Oct-1

0

Nov-10

Dec-1

0

Jan-1

1

Feb-1

1

Mar

-11

An

nu

ali

sed

Per

ce

nta

ge

of

Tu

rno

ver

Annual Turnover Annual Turnover Within 2Yr Tenure

Organisation #2

• Career development opportunities

• Remuneration

• Dissatisfaction with roles

• Organisational culture

Shareholder

Why is this the “Perfect Storm”

What is our response?

Culture

Capability

Capacity

ChangeProgram

What is our response?

WP Current Operating Culture

2009

WP Target OCI 2013

Industry (Gas/Electric) OCI Actual

2010

What is our response?

• Our value proposition

• Retention

• Recruitment

Come to WA

A final word

Questions