KEY POINTS:
David Baldwin
Chief executive
Contact Energy
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How was 2006 for Contact?
It's been a challenging year, but rewarding. Starting as chief executive of Contact towards the tail end of the [aborted] merger with [majority shareholder] Origin Energy presented some specific investor relations challenges.
More generally, the increasing concern around climate change has come to focus the company's attention on expanding its renewable energy base and responding to the carbon challenge in a meaningful way. 2006 [was] also a year in which Contact has refocused its attention on what it will take to understand and delight our nearly 600,000 customers.
Contact's greatest achievement?
Despite the increasing focus on renewable energy, Contact's natural gas-fired power stations helped keep New Zealand's lights on during a particularly tight winter.
While Contact has major investment plans in renewable wind, hydro and geothermal, our natural gas-fired plants are also critical to the country.
A major achievement was executing contracts which position Contact in wind generation in a meaningful way as well as - in addition to negotiating and securing contracts for an additional 170 petajoules of natural gas; providing greater fuel security for our thermal power stations.
And greatest disappointment?
Some of the misunderstanding over the terminated Contact-Origin merger has been disappointing. I'm also disappointed New Zealand is not further down the path of pricing and trading carbon across the economy, as a first big step towards reducing emissions.
What will be the major challenges for your company in 2007?
Contact will be challenged to mitigate the impact of rising fuel costs; we expect to progress major new renewable generation projects in wind, hydro, and geothermal - and to continue to understand where natural gas-fired generation fits into New Zealand's energy supply.
What do you expect from the economy in 2007? How will that affect Contact?
I expect inflationary pressures are likely to increase, with perhaps a decline in discretionary spending. Electricity demand is likely to continue to grow steadily at around the current rate.
What was the most interesting business story of last year?
The Government's regulation of Telecom.
Who was your mentor? What did they teach you?
I was fortunate to spend time in conversation with, and listening to, several leaders of significance in 2006. One of the most meaningful was Bono - who, when interviewed by Bill Hybels (another leader I hold in high regard) - talked about how each of us has "currency" in various forms.
The key question, according to Bono, is how we choose to spend that currency in order to make a difference.
Where are you going for the holidays?
Near Kaiteriteri beach in the Nelson region with family and friends.
What will you be reading?
I'll be reading The Endurance by Caroline Alexander, the story of Shackleton's legendary Antarctic expedition; and The Tipping Point by Malcolm Gladwell.
