Sustainable governance, financial and risk management foundations

Te Teo is the foundational pillar of our work. Drawn from the te ao Māori concept of a hitching stake, Te Teo underpins and supports the delivery of our pou through robust governance, good financial management and identifying and mitigating risk.

Supporting links

Who we are
Disclosures and submissions
Governance statement
ISO and NZS certifications
Integrated Report

Goals and targets FY27

Here's what we want to achieve for Te Teo over the short, medium and long-term. 

 

Short term (1 April 2026 - 31 March 2027)

  • Financial credibility: Maintain our existing S&P credit rating (BBB).
  • Governance: Undertake a refreshed Board competency evaluation, and continue our education focus on a deeper understanding of technology and digital business, and te ao Māori.

Medium term (1 - 3 years)

  • Supporting energy affordability: Continue work in developing nonnetwork solutions (both through batteries and flex tenders) to continue to explore cheaper alternatives to network investment Capex.

  • Supporting energy affordability: Continue procuring flexibility services to defer growth investment, aiming for about $100m of deferral.

  • Keeping our technology system and data secure: Achieve Board approved target score (aligned with Australian Energy Sector Cyber Security Framework) within three years. 

 

Long term (3+ years)

  • Supporting energy affordability: Fully embed a DSO programme for Powerco where we partner with customers to optimise opportunities for distributed energy resources and other flexibility applications by 2030. In FY27, the focus is on enabling technology and automating currently manual processes as business-as-usual.

  • Uptake of new technology and innovation: Successful innovation allowance applications with the Commerce Commission, exceeding $20m over five years. This will provide Powerco with access to funding for innovation projects that wouldn't otherwise progress.

What we did during FY26

  • Supporting energy affordability: We have continued developing our pole-mounted LV battery energy storage system (BESS) solutions, although equipment issues have delayed us fully testing the capabilities of the system. We have also started exploring larger ground-mounted BESS solutions.

  • Supporting energy affordability: Our goal was to procure flex services to allow the substantial deferral of at least $20m of network capacity projects. By the end of FY26, the first tranche of flexibility contracts were being finalised to allow deferment of growth projects valued about $22m. Other projects being negotiated may increase this total to $155m, with deferral typically 4-6 years.

  • Keeping our technology system and data secure: Powerco has benchmarked its cyber-security against the Australian Energy Sector Cyber Security Framework (AESCSF) industry standards and approved a baseline target. Areas for continuous improvement initiatives have been identified, to maintain resilience and protection of customer data in an evolving threat landscape.

  • Risk management: Powerco's risk team facilitated assessments across 37% of FY26 business plan initiatives ensuring a consistent approach to the evaluation of key project risks and development of action plans in accordance with risk appetite boundaries.

  • Financial credibility: We maintained our S&P BBB credit rating through FY26. Continuing to maintain this rating ensures we have access to debt markets at an affordable level to fund continued investment in our network. This helps to maintain a reliable and resistant network for our customers, to support decarbonisation and investment in new technologies while balancing affordability.

  • Governance:  During FY26, Directors engaged in competency and education sessions relating to areas previously identified as having lower levels of expertise. These included a cyber threat update and integrated cyber risk management session, NZ Government engagement sessions, and a major cyber incident tabletop exercise. Further education, including a focus on te ao Māori understanding will occur during FY27.

  • Governance: All annual performance reviews were undertaken as per the Health and Safety, Audit and Risk, Regulatory and Asset Management, Treasury and HR and Remuneration Committee charters. This target will be replaced with targets that more closely align with our material areas.
  • Regulatory settings: The Commerce Commission's final decision on the gas DPP4 reset was released in May 2026 (outside of FY26). A reduction of Capex allowances to 86% of our Asset Management Plan forecasts for the five-year period will have some financial impact from October and requires adjustment of investment categories, scale and cost allocations.
  • Supporting energy affordability: A dedicated programme team has been established with the mandate to develop the functions and services of a DSO. This progressed well during FY26, and several demonstration pilots were successfully completed and some major initiatives kicked off. In particular, expressions of interest were published for flexibility services on six locations, via multiple public channels. These sought customer and commercial flex where network constraints are forecast in the foreseeable future. Following successful negotiations, a number of flex contracts are now being finalised, which will defer about $22 million of upgrades by FY29 (with a potential of up to $40m more to come by FY30). Another major success was the procurement of network operation data and the development of a platform that now gives us LV network visibility across >70% of the network.

What we did during FY25

  • We exceeded our target of a third of our FY25 business plan initiatives having a consistent risk assessment approach delivered.  These are aligned to our Enterprise Risk Management framework, risk acceptance criteria and mitigation responsibilities. Response plans to these events have been formulated in co-ordination with regional and national emergency response agencies and other key infrastructure owners.
  • Our S&P credit rating was maintained at BBB, providing confidence in our financial stability.
  • Proactive engagement with the Commerce Commission, fully informed and supported information provisions, and the ability to apply for extra funding throughout the regulatory period, have assisted in delivering regulatory settings that provide certainty on our ability to fund the growth and renewal of our electricity network.
  • Our Governance Board undertook two ESG professional education sessions on Cyber/AI and Health and Safety.
  • Reviews of performance against all Board charters in FY25 with no material non-conformances.  
 

 

The pillars of our work