A great working relationship already: new network owner

Super excited: Firstgas Group chief executive Paul Goodeve. Picture supplied

The purchase of Eastland Network by Firstgas Group could help New Zealand reach its carbon neutral goals by electricity and gas distribution working together, the network’s new owners say.
Firstgas Group has now received Overseas Investment Office approval for its parent company, Igneo, to purchase the region’s electricity distribution network for $260 million.
Speaking to The Herald, Firstgas Group chief executive Paul Goodeve said the company was “super excited” about the transaction.
“Since September, we have been working very closely with people in Eastland Network and they really impressed us with their expertise and diligence, particularly over Cyclone Hale and Cyclone Gabrielle.
“Given we have such a great team, we are not doing anything a heck of a lot different to start with. In the aftermath of Cyclone Gabrielle, we will be having a think about what the network looks like in the future. 
“I think that’s a really important discussion for the community to have as well, about what is the level of resilience that we need and how can we achieve that in a cost-effective way.”
Mr Goodeve said the network would become Firstlight Network and would be a separate entity to Firstgas Group, but both companies would be working together to run the network.
“What we’re already seeing is a great working relationship between the two businesses. We are sharing ways of doing things and sharing information together on all manner of things.”
The vast majority of the team will report to Firstgas chief operating officer Iwan Bridge.
Regulatory and finance roles at Eastland Network would eventually work for Firstgas Group’s regulatory and finance teams.
The group has started to introduce its award-winning workplace culture programme “Got Your Back” to the Gisborne team, he said.
Asked about earning a return on its investment, Mr Goodeve said the company was purchased based on the regulations around how much distribution networks can earn and it would operate the business within these regulatory requirements.
The Commerce Commission was currently reviewing the rules which it uses to determine the prices for networks. 
“We are contributing to that review and seeking a couple of tweaks to the current regime.”
Mr Goodeve said at $260m, the deal would take “a lifetime” to pay for itself.
“That’s one of the advantages of having the owners that we have. They have a long-term strategy and they are looking forward 20, 40 years into the future when they think about investments like this. 
“The advantage we have is that our owners are very focused on the long term, and what is important to us is the sustainability of the business over the long term.
“Eastland Network is a great business — it is well run by a really professional team. The network assets are generally good, in terms of their age profile. 
“These assets do not come up very often. So, we were very keen to have a look at it when it did.”
As an infrastructure company, Firstgas Group was experienced in running gas pipeline networks. It delivered natural gas and supplied LPG to more than 430,000 Kiwi homes and businesses every day, he said.
“While a large part of our business is focused on gas, we are heavily committed to the de-carbonisation of New Zealand and working on how we can get the country to net zero by 2050. 
“Our involvement with Eastland Network is part of that journey but we are also doing lots of work around lower-carbon gas. We hope this year to kick off the country’s first biogas injection into the gas pipeline facility.”
The company also continued to research hydrogen, with a hydrogen electroliser expected to supply hydrogen to industrial customers in the future.