A rift has developed over what to do with the dividend electricity consumers receive from Unison profits.

Unison owns the electricity lines in Hastings, Napier, Rotorua and Taupo and is owned by electricity account holders in Napier and Hastings.

This year they received a record dividend cheque for $200 which could have been more had the Hawke's Bay Power Consumer Trust not asked Unison to hold back $1.7 million to put overhead power lines underground.

The elected trustees, who represent consumer-owners, have diverted a similar amount since 2008, totaling $10.1m to 2014 and in 2015 undertook a $9m five-year undergrounding plan.

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The trust recommends which streets need an overhead makeover. Overhead lines and power poles are removed before the end of their working life and replaced with underground lines.

Millions of dollars have also been diverted by trustees to home-insulation programmes and the safety testing of electric blankets.

The trustees have assumed approval of the dividend distribution but three trustees are crying foul on a proposal to ask owner/consumers if they would like to cap the dividend cheque at $200 and divert any extra to worthy community projects.

Trustee Diana Kirton said the existing dividend diversions were related to electricity, so were appropriate for the trust.

With fellow trustees Helen Francis and Ken Gilligan she has formed a block running in the upcoming election using the slogan "your cheque, your choice".

Spokesman for the five challengers is recently-retired Unison chairman Kevin Atkinson, who has overseen Unison 's dividend-enabling growth into other sectors including an Indonesian transformer company with strong growth potential.

Mr Atkinson said lack of consultation between the trust and consumers was a serious issue.

"There has never been consultation with the community as to what it wants," he said.

"It might want the money added to the dividend cheque or used for something else. What I am pledging is a lot more engagement with consumers around those sorts of issues.

"Let us have a conversation with the consumers, particularly while we are doing the ownership review - it is the perfect opportunity and would be low-cost."

The ownership review is held every five years. An outside report is commissioned to outline ownership options to the trust.

If the trust was sold consumer-owners would receive at least $10,000 each, but there would be no more dividend cheques.

Nor would there be hikes to line charges because they are closely controlled by the Commerce Commission, to ensure network reliability and consumers' protection.

The real loss could be Unison's unregulated subsidiary companies, with significant growth prospects.

At the previous ownership review a PWC report said the current trust structure had served Unison Networks well, but because Unison had increased its borrowings, and the trust had no additional reserves of its own, Unison may have to forgo future opportunities.

It also said the election cycle may generate risk of instability.

Unison directors' report to the trust said raising capital was not an issue, but agreed with PWC about the election cycle.

"The directors consider that the company has been, and continues to be, well served by the elected trustees over recent years but recognises the potential for significant change in the make-up of the trust following an election and the potential for a sea-change in the direction of the company as a result,'' it said.

It also said the current model worked well but recommended the trustees review the election process and consider increasing the number of trustees from five to six, lengthening trustees' terms from three to four years, staggering the election cycle so that no more than half of the trustee positions are subject to re-election at any one time, removing the limitations on the number of consecutive terms a trustee can serve and providing guidelines for the skills required of trustee candidates.

Trustees receive $22,000 annually and the chairman $44,000. Both Ms Kirton and Ms Francis are also on the Hawke's Bay District Health Board, the region's largest employer, with a half-billion-dollar budget, for which they receive $20,400. Mr Atkinson is chairman and receives $42,000.

He said the trust's main roles were simple: to review the Unison board's annual business plan, appoint directors and distribute the dividend, he said.

"In the last eight years they have never changed a word of the business plans, so you can't say that has been particularly onerous."

A consultancy did the majority of director selection and the dividend distribution was straightforward.

"There is no way you can justify the amounts they have been paying themselves," Mr Atkinson said of the trustees.

Five trustees are elected to the trust every three years by consumers connected to Unison's electricity network in Napier and Hastings.

Voting documents will be delivered from Monday September 11, 2017 to more than 59,000 people.

Completed voting documents can be returned by post, online or be hand delivered to the Trust Office.

The five candidates planning to consult over capping of dividend cheques are Kevin Atkinson, former Napier MP and Cabinet minister Chris Tremain, paediatrician and former children's commissioner Russell Wills, DHB board member and former Napier mayor Barbara Arnott and DHB member and former pharmacist Peter Dunkerley.

Also in contention are retiring Napier Port CEO Garth Cowie, insurance broker Bill Reilly, accountant Giles Pearson, former Hawke's Bay regional councillor Liz Remmerswaal and consultant electrical engineer and former trustee John Geoghegan.

Hawke's Bay Today sent the same five questions to all candidates.


1/ If Unison was sold all consumers could receive a cheque for more than $10,000. Do you support presenting that option to consumers? Why?

2/ Would you support the proposed capping of the annual dividend cheque amount that is mailed out to consumers so the funds could be spent on worthy community projects? Why?

3/ Do you believe the trustees are fairly compensated and have an appropriate number of meetings? Why?

4/ Unison has international business interests. Should it continue to expand and diversify or should it stick to being a lines company? Why?

5/ Are you happy with the trust's performance? Why?

Barbara Arnott

1/ Electricity is part of our fundamental infrastructure. It's too important not to be owned by the consumers. Although an ownership review occurs every five years I would not support selling.

2/ Already some of the dividends are spent on community projects. I support consultation with consumers giving them the options.

3/ Very well compensated. Meetings should be held only when necessary.

4/ It should expand and protect the interests of its consumers. The dividend to consumers can only grow when Unison is working well - how can that be bad?

5/ I'm standing because I think I can bring a better connection between consumers and the trust. People make good decisions when they have good information - I think it's a privilege to work to facilitate that.

Kevin Atkinson

1/ Every five years, the trustees are required to initiate a review of ownership of shares in Unison.
The last review was completed in 2012. The next review will commence in 2017 and finish in 2018. Each review requires the trustees to obtain an in-depth report from the Directors of Unison that sets out proposals and available options for future ownership of the shares in the company.
After taking into account the views of the directors and the views expressed in the public submissions, and allowing people to speak to these, the trustees then make a decision on the future ownership of Unison at a public meeting.

If elected I would respect this process, however my personal view is that the consumers should retain 100 per cent of Unison as I believe that the electricity network is such an important infrastructural asset affecting their daily lives that it should continue to be owned by the Hawke's Bay consumers.

Retaining control over it and the benefit of its earnings should remain here in HB. The share price just represents a short term , one-off snapshot of its future earnings. Those earnings are assured and will only continue to improve. On the basis of this view I would have great difficulty in presenting an option to consumers to sell the company shares.

2/ No I do not support capping the dividend. I support the current level of dividend and would hope that it will continue to grow over time.

I would however want to consult with the consumers over the $1.5m the trust forgoes in dividend each year to fund undergrounding overhead power lines and the $382k the trust spend on Energy Efficiency projects each year.

I would also like to explore an alternative to mailing dividend cheques ie direct crediting the consumer's bank account or arranging for a credit to be applied to the consumer's power account. I would also like to consult on an option for consumers who wish to donate their dividend to a charitable trust that would fund projects benefiting consumers.

3/ In my view the remuneration paid to trustees is excessive.

The chair receives $44,000 pa and trustees $22,000k pa, both plus meeting fees. For comparison the chair of HB DHB receives $42,000 pa and board members $20,400 pa. I believe that the appropriate number of meetings for the trust each year is five to six. If elected I would support an independent review of trustee fees.

4/ Yes I support the Unison Directors strategy to grow the company in both its regulated activities, ( ie lines business), and the company's unregulated business activities, (ie manufacturing).

Growing the unregulated business activities will provide dividend growth greater than could be achieved in the regulated activities which are controlled by the Commerce Commission due to monopoly aspect of lines companies.

I fully support Unison's establishment of a manufacturing plant in Indonesia which will enable the company to compete strongly in the Asia and Australian markets. Over time this Indonesian business has the potential to grow the Unison profit and dividend the trust receives significantly.

5/ In my view I feel the trust has failed to engage with the consumers well enough over many years. Outside the Unison employee's present, only seven consumers attended the 2017 Trust AGM in July.

If elected my pledge is to engage and consult significantly better with the Hawke's Bay power consumers, especially on the current trustees decision to use almost $2m of the company dividend on projects with no consumer consultation. ( Read response to Question 2)


Garth Cowie

1/ If the trustees felt that is what they and the consumers wanted to consider, then yes, but that option shouldn't be presented by itself. Selling is just one end of the spectrum and would be counter to the long-term interest of consumers, with profits disappearing overseas.

2/ No. I don't believe that is appropriate - it is a consumers' trust and not a charitable trust. If you look at local elected representatives' decision making of late then I think having it quite narrow and supporting the consumers is clearly in their long-term interests.

3/ Unison should continue expanding because that is a way of reducing the risk through diversification.

4/ Without being a trustee and knowing how much work and reading is involved it is difficult to make a call on that, but it appears to be about fair for the number of meetings they have to attend.

5/ Yes. They have a number of projects outside the dividend area, such as the insulation in homes, which is in the trust brief. Overall, within the mandate they have, they have done a good job especially with choosing directors for the Unison board. The Unison directors have done an excellent job thanks to.

Peter Dunkerley

1/ Unison is a valuable investment and significantly benefits our community, it has the potential to improve its performance. There is no reason to sell.

2/ The trustees should review the annual dividend cheque in the light of the company performance.

I would want to understand the views of the community to decide how best the dividend should be allocated.

For many consumers $200 is important to manage their budget, however that is not all our community so some flexibility could well be attractive to many consumers. An increase in the availability of charitable funds would be warmly welcomed by many voluntary organisations.

3/ The remuneration of the trustees is generous by comparison with other similar roles. The remuneration should reflect the contribution and success of the trustees and be independently assessed.

4/ The international business is a successful initiative, it provides valuable profit generation in an unregulated market. It has the potential to develop further. The challenge is managing the risk, but there is significant opportunity for growth in this facet of the business.

5/ I believe that the trust's performance can be improved with more skilled governance.

Helen Francis

1/ The option of the future ownership of the company is presented to the public for consultation every five years in a formal ownership review.

This regular review is stipulated in the Trust Deed. At each ownership review the response has been overwhelmingly to keep Unison in consumer hands.

I personally also believe in retaining consumer ownership as this secures ongoing pricing as much as legislative compliance allows and ensures security of supply. It also means that the company (and its jobs) remain local and we retain the value of the company for future generations rather than offer a one-off windfall.

2/ A group of candidates are standing together to take the full dividend away from our consumers. I do not support this tactic and this is my main reason for standing for re-election.

The reasons for my strongly held belief are as follows: Firstly, it is the consumers' dividend to do with what they wish. It is not for the affluent to tell our families that are struggling financially that there are better ways to spend their money.

Secondly, other trusts in NZ that do spend the dividend on community projects, spend it on projects that typically do not benefit consumers equally.

The people in Hawke's Bay who most enjoy receiving the dividend cheque at present are older people and young families. Distributing some of the dividend to "community projects" will mean the money is not received and enjoyed equitably by all consumers, especially the more needy members of our community.

Thirdly, Unison already does a huge amount of good work through its sponsorship of local sport and other causes, so I feel this type of sponsorship is covered already.

Finally, I would be concerned as to who would make the decision about the projects that are "worthy." There are candidates standing in this election who have interests in facilities they deem worthwhile or needy, or community trusts, or pet projects. I do not think trustees should be making those choices with consumers' money.

3/ Yes.

4/ Unison purchased the ETEL company in 2007, before I became a trustee and has recently moved production overseas. Apart from the initial investment, this is an operational matter for the Unison board to decide upon.

5/ The trust's role is to carry out the intent of the Trust Deed. The main ways trustees do that is by appointing high calibre directors to the Unison Board, setting the strategic direction and making decisions about the dividend.

I believe the trust has performed well. Unison now has a younger, more diverse board and this positions it well for the future.

John Geoghegan

1/ Yes. I support presenting this option to consumers - every trustee is duty bound to do this as part of the Trust Constitution.

I, like all the trustees before me, have supported this provision and have laid the matter before the customer - every time the customers have overwhelmingly submitted to retain ownership and I personally agree with the retention of ownership .

Yes the figure you quote looks attractive but if Unison is sold there will be a pot of money but the consumers may not get any (or all of the funds ) immediately or over time.

The funds may be held in HBPCT's name for distribution as thought fit and that could be to any "pet projects" as decided by the trustees at the time (over years to come).

Do we want a "Chinese Bank" to make future profit from our power usage? Because that is what they will do. Why not make our own profit?

Personally I doubt the figure of $10,000 - it is only the book value.

How would the funds be distributed fairly and equitably?

How is a customer who had paid their bill for 70 years to be paid versus a customer that moved in one month ago from another area and contributed nothing to the asset?

How are our next generations going to be able to handle the loss of the customer owned asset/cheque - inter generational issues?

2/ No. Absolutely not.

The HBPCT is a consumer trust and was set up originally as that to return the distribution of the Power Company Profits to the consumers that contributed ownership and power payments to the profit each year.

I do not support changing the name to community trust to get around the point above.
I do not believe it is appropriate that five HBPCT trustees should act as " community benefactors " to distribute funds that belong to the consumers.

3/ The trustees are more than adequately compensated for the number of meetings and other commitments.

4/ Unison should stick to its core business - the international business expansion has happened since my last involvement. I do not believe I would have supported this action. I know some of the other candidates have been responsible for this expansion and see this as reason to change the distribution conditions .

This aspect of the company is seen as the management playing with the customers' capital and an excuse to paddle in a bigger pool and make more money to add to the dividend - I would like to see some belt tightening at Unison itself .
I am aware the other lines companies in NZ have come a "cropper " over such business diversity

5/ Yes - but not sure about the international business above.
The trust is maintaining good return to the consumer.
Being a previous trustee I have been happy we were doing a good job for the consumer.

Ken Gilligan

1/ I can support putting that to consumers because it is their cheque, their choice.

Consumers will have the chance to make submissions on this option, as any sale of the shares is one of the ownership options which trustees will consider when we undertake the five-yearly ownership review early in 2018.

A report from Unison directors to the trustees will consider all ownership options, including distributing shares to consumers, sale of shares to the public, sale to financial institutions, compared with keeping ownership by the trust.

The report will be made available to the public for their submissions, as part of the ownership review.

2/ No, this idea can't be done at present, because the Trust Deed does not allow it to happen.

The object of the trust is to hold the shares on behalf of the consumers and distribute to them the benefits of ownership of the shares in Unison. Legal advice is that the trustees must pay, apply or appropriate the whole or any part of dividend income for the benefit of consumers. It's not clear that trust funds can go to community funds or projects.

3/ Yes. Regular monthly, and special meetings, are held as needed. I think trustees are fairly compensated for the time involved and the legal responsibilities and liabilities they face as trustees.

4/ Expansion and diversification should always be considered. The wise expansion and diverse business investments of Unison over recent years have been key factors in the growth in value and worth of the company, for the benefit of its consumer owners.

5/ Yes, I am satisfied with the trust's performance in their duties and responsibilities. Trustees have considerable understanding and background in the affairs of the company and this assists in the effective monitoring of Union's performance.

Diana Kirton

1/ Selling Unison and distributing the money must remain a choice for consumers. The trust deed requires an ownership review to be held every five years. It is mandatory that power consumers get to choose whether to own their company or not.

Current trustees Helen Francis, Ken Gilligan, and I are very strong advocates for consumer choice. We will ensure power consumers, have the choice, both about receiving the dividend and retaining ownership. We say "your cheque - your choice".

2/ At this power trust election, a group of candidates have banded together with an agenda to spend power consumers' money on their chosen community projects.

The trust deed requires the dividend to be returned to Hawke's Bay power consumers who are 100 per cent owners of Unison. This is a consumer trust, not a community trust. Consumers are the shareholders and they must have the choice on how to spend their own money.

That's why we are saying to voters it is: "your cheque - your choice".

3/ As trustees we are proud that on our watch, Unison has grown into a large diverse international company. Monthly meetings ensure trustees are able to monitor the company effectively and keep up to date with its operations.

Our job is to ensure Unison always acts in the best interests of Hawke's Bay power consumers. The role is very much about community service and trustee compensation is quite adequate.

4/ The trust has actively encouraged and supported Unison to establish an ambitious and diverse portfolio of electricity sector related businesses. Very strong growth has resulted in higher profit levels and greatly increased company value.

If elected, I will be vigorously pushing Unison to increase the dividend for payment back to power consumers, not spent on favoured community projects. It is all about "your cheque-your choice".

5/ It was our duty, as prudent trustees to ensure maximum benefit was returned to consumers. This year's $12.7m dividend result speaks for itself. Every power consumer received a cheque for $200.

Current trustees have kept faith with the trust deed. However, this is under threat from a group of candidates who want to spend shareholders money on their favourite community project.

Power consumers are urged to consider their vote very carefully if they want to continue receiving the full value from their lines company Unison. My unequivocal position is: "your cheque - your choice".

Giles Pearson

1/ There is already an ownership review undertaken every five years as required by the Trust Deed.

In the past this review has always recommended the status quo. However public consultation around ownership typically sees only a handful of respondents. I think trustees need to engage more with consumers during the current ownership review process and be open with consumers on the options.

Disruption to existing models of delivering services is all around us (think of advances in solar and battery technology allowing consumers to go 'off the grid') so even investment in an electricity lines network business is not without long term risk.

2/ I support a small portion of the Unison dividend being available to community organisations.

This would require a change to the Trust Deed and a full public consultation process, so nothing could decided behind closed doors.

Those involved in charitable and community groups know how difficult getting funding is - and it's getting harder all the time. We need to be prepared to pull together as a community to help.

The distribution of any funds to charities or community groups must be via an open and contestable process and not based on the personal views of trustees.

3/ My understanding is trustees meet monthly and are paid an annual fee of $22,000 each ($44,000 for the chairperson).

In my view this is too high for an organisation which has a high 'public good' element to it, similar to local body councillors. I would support a reduction in fees to less than half this level.

4/ As a consumer owned business I think Unison should concentrate on maintaining the electricity network assets. Investment into non core areas is another aspect trustees should consult with consumers about.

Consumers should be aware and understand the commercial risks which Unison undertakes using funds which could otherwise be paid out as dividends.

5/ The trust is in control of an asset that might be worth $750m.

It is Hawke's Bay's largest community asset yet we hear so little about what the trust does, so I think trustees need to be more transparent and consultative.

The fact that only seven consumers who were not trustees or Unison employees attended the last trust AGM shows that whatever trustees are doing at the moment it is not working.

Bill Reilly

1/ No. In accordance with the Trust Deed of the Ownership of Unison Networks Limited a review is required every five years.

Each review requires the trustee's to obtain an in-depth report from the directors of Unison which set out proposals available. This does become a public document on which the trustee's receive public submissions on.

Thus I have to keep an open mind. It comes down to what the people of Hawke's Bay want with this valuable regional asset. Previously there has never been a level of support to sell it and I am about investment in growing Hawke's Bay for locals.

2/ I believe that a separate trust should be set up called "Hawke's Bay Power Consumers' Capital Charitable Trust" with consumers having the choice of keeping their cheque or donating their dividend to this trust, at their own discretion and preference.

This trust to be formed, would then apply for charitable status that proceeds can be distributed in full ($98.51 additional being the tax paid . . . making of $298.51 being donated) to organisations in the catchment area for capital expenditure for arts, cultural, sport or regional assets development.

3/ Yes

4/ Based on the research I have done . . . it appears to have a good potential in a growing market where it is based, but it should not loose sight or direction of its reason for the company's existence - that of a reliable regional mainline networking service.

We need new energy and fresh ideas, leadership and governance experience that puts forward solutions and opportunities, that commits to working for the shareholder first and delivers more for those of us who live and work in Hawke's Bay.

5/ Mostly, but I feel that the time has come for a fresh line of thinking based on and around the trusts name . . .Hawke's Bay Power Consumers' Trust. Keeping the power of decision making and the right for locals to make local decisions that impact on the economic benefits of Hawke's Bay.

If elected, I would welcome public discussion on the vulnerability of the supply of reliable power to all of Hawke's Bay, all of the time.

How vulnerable are we? What is the risk factor of non-supply? What are the flow-on effects to the region? In light of last year's air disaster in Gisborne, which resulted in loss of power to the Gisborne region for days, what contingency plan is currently in action for Hawke's Bay?

With those thoughts, exacerbated by the obvious division in candidates dividend payout opinions, I fear that without a "balanced" board of trustees the power consumer - the shareholder - is going to have its choice taken away, and be dictated to. I believe we owe it to the shareholder to deliver an option that ensures our region grows and prospers for everyone living in Hawke's Bay.

Liz Remmerswaal

1/ No absolutely not.

That would be the last cheque consumers would ever see and we would have no control over power prices either.


I do not believe that privatising public resources is beneficial to New Zealanders, and experience has shown that we have been sold short.

Power is tremendously important and selling our NZ power companies has resulted in higher prices. Also it means less accountability to the public, like these elections, and there is no longer any impetus for public good.

2/ My suggestion is that we consult with the public about what they want to do with their dividend cheques. I know many people wish to keep it and really need it, and I would not want to take that away.

I do think it was better when the cheque came out in November and could brighten people's Christmas time, but I am not sure why this was changed.

Meanwhile I am aware that there are others who would prefer their money to be put towards a public good project, such as electric car infrastructure or subsidies for solar power, and I think consumers should have the choice about this.

The trust has the power under its legislation to make this happen as determined through public consultation.

3/ I'm not sure what the compensation is but I am guessing it is probably a fair amount for the responsibility involved, and no doubt there are enough meetings to get the job done. If not I'm sure this can be changed too.

4/ I would want to see a business case for this. I don't think that publicly owned bodies should engage in high risk operations generally, though if it was something in line with our goals and in the public interest, particularly involving decreasing our carbon footprint, enhancing sustainability and dealing with climate change, let's look at it.

5/ I think it is adequate but could do better, hence I would like to influence that direction, much as I did when I was on the regional council promoting sustainability and environmental wellbeing.

Chris Tremain

1/ The trust is required to consider ownership on a triennial basis and to consult with the community on this.

To present only some of the ownership options would not be fulfilling my responsibility as a trustee. Any discussion with the community would present all options, from the status quo, to a full sale, together with the advantages and disadvantages of each.

2/ The existing trustees have decided to reduce the current dividend for the following projects: $1.5m for undergrounding powerlines and $382,000 for energy efficiency initiatives.

I do support a discussion with the public on the establishment of a community fund as an alternative to, or in addition to, the above mentioned projects.

All the options regarding a fund for community projects would be presented for consultation from capping the current dividend to a voluntary contribution. Public opinion would be pivotal in any final decision.

3/ The trustee income appears to be significant, especially one off meeting fees, which I think are antiquated. I do support a review of this compensation.

4/ Unison will face many disruptive issues to its traditional lines business over the next 5 to 10 years. Solar power initiatives, as just one example, will have a significant impact on the distribution business.

Managing the company through this time will be challenging with significant risks to all of us as shareholders. Diversifying the business may be a key strategy to protect shareholder value and dividends. Competent trustees with national and international business experience will be critical to the governance of Unison and HBPCT.

5/ The Trust is responsible for one of Hawke's Bays most significant infrastructure assets. There are challenging times ahead. Competent trustees, who are prepared to consult the community over the tough issues, will be critical to maintaining shareholder value and profitability at Unison into the future.

Russell Wills

1/ The five of us standing together haven't discussed this - I'd need to talk with my colleagues.

2/ We will consult the community on the dividend and how it is distributed. We all agree that is the right thing to do. I personally would like to se a proportion go to worthy community causes through a transparent and contestable process, but again the first step is to consult the community on how much and how it would all look like.

3/ The current trustee fees are excessive and all five of us believe they should be reviewed and they should be less.

4/ Those international investments have been very successful and they are Unison's core business, so I think if there are business opportunities overseas within its sector and the business case stacks up then that profit should be returned to the community in the way the owners thinks should be.

5/ Unison is performing very strongly which is to the credit of the Unison board, but I thing the way the dividend is distributed could be more transparent and the community could have a say about that.