KEY POINTS:
Vector chief executive Mark Franklin is a self-professed family man.
Sure, the 46-year-old Australian works hard managing the country's largest energy distributor, but getting home to his wife and three children is something he values above all else.
"It is really important ... [a home] is where everything
is centred. I see a lot of expats that still have a house in Melbourne or Sydney, but it does not really give them a sense of permanence.
"I am a family guy, a sense of permanence is more important than anything else."
He sees these values as being universally important and has tried to instil them at Vector and its two recent acquisitions, United Networks and NGC, acquired in 2002 and 2004.
"This stuff is really important to me," he says.
"When you merge a business, it is not as simple as cutting staff and getting synergy benefits. It is about developing culture ... forget about all the big things if you have not got a company that can handle them."
He says moves such as the Vector Life programme - which helps people to understand the need to balance work and home life - are a direct result of this push to develop a team.
For a person who speaks so enthusiastically about culture it is perhaps no wonder Franklin has won praise for the way he has combined the three businesses into one.
But the next test is perhaps about to begin.
Franklin says the days of big infrastructure acquisitions are - for the moment at least - over for Vector. Instead the firm is now looking at how it can generate more revenue from its customer base, which amounts to 670,000 homes or 40 per cent of the addressable market.
"I am not sure that owning lots of smaller [lines companies] is in our strategic future.
"We could help some manage their businesses and leverage some of our capabilities a bit better.
"But ownership is not the way to go. Just going into electricity and more regulated assets may be not the best use of our investment dollars. The thing is now to look at alternative revenue streams."
Franklin is - perhaps deliberately - vague about what the company has in mind. But he is big on ideas such as convergence.
For him this is more than the multi-utility telecommunications, gas and electricity strategy Vector executives have discussed in the past.
Instead it is also a convergence of trends and ideas and technology.
New Zealand was once a country that had a ready supply of cheap energy, but no longer enjoys this competitive advantage.
Meanwhile, debates on greenhouse gases and environmental sustainability will focus attention on electricity distribution and generation.
These trends, coupled with advances in information technology and the emergence of widely available high-speed internet, would reshape the country dramatically over the next 10 years.
"The future will change so significantly because [trends such as] terrorism, proper broadband, sustainability issues, ecological issues ... they all have huge momentum.
"You could have said the same 10 or 20 years ago, but I really think that this next 10 years is going to see very significant change.
"So you have to be a lot more flexible and ready as opposed to 'business as usual'."
Vector would marry its expertise in metering technology and energy management with information technology to make more efficient use of energy and deliver on Government objectives of sustainability and combating global warming. Investments could range from solar and wind generation to demand management, such as smart meters that tell consumers that power prices are running high - giving them an incentive to reduce their usage.
"We run the networks and these [investments could] have a big impact on our capital spend.
"If we can delay some of that expenditure by offsetting maximum demand peaks or decreasing loads, it saves you a lot of money."
But before Vector embarks on any of these plans it must settle its score with the Commerce Commission.
In August the commission accused Vector of earning an excessive return on its investments and had threatened price control.
Vector lost almost $300 million from its market value overnight, and in response it put on hold or began to review $630 million of capital expenditure until it was confident it could make an adequate return.
The regulator backed away from the threat last month, instead agreeing to a formal audit of Vector's plan to remove by 2009 subsidies to Auckland customers.
But the agreement is still a draft. That still leaves the door open to the commission changing its mind, so Vector will not begin considering the new investment until the deal is done.
Despite the heat of the debate, Franklin is still confident that the Government and the regulators are beginning to understand the conditions necessary to encourage investment in long-life infrastructure assets.
"The Government policy statement was a really positive start," says Franklin of a directive to regulators that they should ensure that their actions do not discourage investment.
"You are never going to get regulatory certainty for the rest of your life. Any country looks for a five-year pathway, with some reset and some sharing of returns between customers.
"I would call this an immature regulatory environment.
"Other parts of the world I have been in it has taken 20 years.
"The regulators are also trying to find the balance.
"We have had a couple of months of really good discussions with the Commerce Commission behind closed doors, and they have come out in support of an administrative settlement, which puts in place a concrete end to this five-year process without introducing new rates of return."
If the agreement is finalised and it stays within certain price and quality thresholds, Vector has 2 1/2 years to decide where it will invest its cash.
"The reset is in April 2009. We can do a lot in that time, and by the way, there will be another 2 1/2 years of learning," Franklin says.
How long does he plan to stay around?
"I have a bit more to do here."
But he adds that no chief executive should stay in place for longer than 10 years.
Mark Franklin
* Age 46
* Married to Michelle
* Three children aged 15, 13 and 11
* Bachelor of Electrical Engineering from Sydney University
* Appointed chief executive of Vector in 2003
* Previously held several leadership roles in energy and technology businesses, including chief executive of Orion Energy in the Hunter Valley NSW, general manager of IBM Asia Pacific and general manager of WELNet, a subsidiary of Hamilton's WEL Energy
