The Essential Energy Corporate Strategy sets a clear direction for how we best contribute to the energy transition. It supports our customer commitments of safety, reliability and affordability while recognising the growing role of the electricity distribution network in enabling the transition from fossil fuels to renewables.

Connecting utility-scale generation and storage in the Central West region marks a smart and innovative step in our contribution to the energy transition. Designed to connect approximately 2.3GW of new renewable generation and storage to our subtransmission network, this initiative could deliver critical infrastructure upgrades that provide a safe, reliable and resilient power supply, while contributing significantly to the State’s renewable energy and emissions reductions targets. Two generation facilities proposed for connection, Forest Glen and Maryvale solar farms and battery storage, are now in delivery, with energisation scheduled to follow.

Locally generated renewable energy is driving connections and customer load across Essential Energy’s network. To support this new generation, Essential Energy is trialling and investing in battery storage to provide network flexibility. More than 40 network and community batteries are integrated into the network (at 30 June 2025), with community battery trials providing valuable insights into how the grid can support the shift to decentralised renewable energy generation and storage. Our pole-mounted community battery trial with Origin Energy advanced significantly this year, with batteries installed across five regional communities. Concurrently, three community batteries in Goulburn, Leeton and Maloneys Beach began trading on the wholesale spot market.

We continued to facilitate the uptake of electric vehicles (EVs) and announced the first market-ready vehicle-to-grid (V2G) solution with our partners including the CSIRO. This successful delivery is a significant step in supporting customers to unlock benefits from their renewable investments. It also demonstrates the potential of EVs in the overall management of the energy system. The transition of our fleet to EVs continued to progress, including expanding our depot charging network to 25 locations (at 30 June 2025) and introducing an electric semi-trailer truck to deliver supplies to our New South Wales (NSW) North Coast depots.

We are committed to supporting high energy users in their own energy transition by collaborating and co-designing solutions that reduce operational costs, improve efficiencies and increase network use. This recognises that the energy transition pathway for large customers can be varied and complex. To support customers’ decarbonisation goals, we completed a study that identified 85 high-potential customer sites for electrifying industrial practices.

We also continued to modernise our core business; most notably, with our new partnership with Kraken to build the next generation operating system for distribution networks. The immediate focus of this investment is to introduce a new billing and market system; this will unlock capability to meet emerging regulatory and business requirements along with customer needs. It will also improve the efficiency of our customer and market interactions.

We also continued investing in digital tools that improve productivity to deliver safe and reliable electricity to customers. We integrated new data into our industry-leading digital twin to provide deeper asset-level insights that can support business decisions. We also digitised the management of more than 60,000 lifting and safety assets in our new ‘Reftab’ app, while the new Electricity Distribution Network Access Register has simplified processes for employees and contractors requiring network access. These are just a few of many digital initiatives that deliver the capability required for the future network.

Our depot and field crews are better connected in rural and remote locations, with more than 250 satellite internet devices deployed to improve digital connectivity – the value of which was highlighted in employees’ responses to the 2025 annual employee engagement survey.

Safety remains the core value for our employees, contractors, customers and communities, reflected in strong performance and a proactive safety culture. We recorded no major lost time injuries during the year, and key safety metrics improved significantly, including a 17.1% reduction in high potential incident frequency and a 47.6% drop in serious claims frequency.

We continued building an inclusive, diverse and growth-oriented workforce with the capabilities needed to navigate the energy transition. We have almost 500 employees in Early Talent Pathway roles, as of 30 June 2025, highlighting the success of our apprentice, trainee and graduate programs.

Essential Energy’s apprentice program has a distinguished completion rate of over 90%, with the vast majority remaining with us as employees. This reflects the strength of the program and the commitment and dedication of our apprentices. We were named 2024 NSW Apprentice Employer of the Year at the Australian Training Awards, with two of our current apprentices named as finalists in the 2025 NSW Apprentice of the Year award.

We remain focused on increasing the diversity of our workforce, guided by our Inclusion and Diversity Strategy. Highlights from the year include providing inclusive leadership training for more than 50 people leaders, bringing more than 70 female employees together for our Women from the Field Conference, and launching a training program to increase disability inclusion in our recruitment process.

Essential Energy received two awards at the 2025 WORK180 Equitable Workplace Awards, for flexible work arrangements and workplace equity and inclusion. For the first time, we were named a Bronze Tier Employer in the Australian Workplace Equality Index, which recognises LGBTQIA+ workplace inclusion.

We are developing a First Nations Strategy which will set our long-term vision for reconciliation and guide us in preparing our second Innovate Reconciliation Action Plan. We have increased the number of First Nations identified positions and Early Talent Pathway positions, with 11 First Nations apprentices and field-based trainees joining our business in early 2025. Our engagement approach is beginning to build meaningful, long-term relationships with First Nations communities. These relationships provide opportunities for communities to actively participate in and benefit from the energy transition through involvement in planning processes, community events and broader initiatives.

Our employees’ job satisfaction and commitment to the Corporate Strategy is measured through our annual employee engagement survey. Employee engagement increased by 3%, to 48% in 2025. This percentage has grown by 33% since our first survey in 2018. We are committed to listening to our people and continuing to improve as an organisation, to remain a workplace we can all be proud of.

Maintaining strong relationships with customers and communities is fundamental to our business. Our Customer Strategy drives continued improvement in the customer experience, together with insights gained from engagement forums including the Customer Advocacy Group and Essential People’s Panel.

To support and empower regional communities, we provided $867,912 in financial support to community groups and charities, through the combined contributions of Essential Energy and our employees. This includes the refreshed Essential Grants program, which provided 13 community organisations across our network area with a total of $151,400 for projects focused on the environment, education, resilience and the energy transition.

An energy business for the future must be environmentally, economically and socially sustainable. During the year we made good progress addressing the three pillars of our Sustainability Strategy: responding to climate change; empowering our people; and enabling regional development and resilient communities.

This annual report includes our first mandatory climate-related financial disclosure against the new Reporting Framework for Climate-related Financial Disclosures for NSW Government entities (TPG24-33). The disclosure describes our material climate-related risks and opportunities, along with governance approaches, business responses, risk and opportunity management processes, and associated metrics and targets. It builds on our voluntary taskforce on climate-related financial disclosures for the previous three years.

Essential Energy delivered earnings before interest, tax, depreciation and amortisation (EBITDA) of $699.2 million for the year which was below the Statement of Corporate Intent (SCI) target by $157.1 million. This was driven by lower gifted asset and customer works revenue of $50.1 million and higher than target labour costs due to wage increases following the conclusion of Enterprise Agreement bargaining. The net loss after tax of $95.8 million was unfavourable to target by $80.6 million largely due to the lower EBITDA. In the year to 30 June 2025, our Regulated Asset Base (RAB) grew by 4.3% to $10.8 billion, built on our continued investment in a significant capital program to support network resilience and including the influence of inflation.

The significant progress we have made this year is a testament to our hard-working employees, who we sincerely thank for their dedication to progressing the energy transition and their unwavering support for customers and communities. We also thank our stakeholders and partners for their continued support. Working together, we can continue building the network of the future and supporting our regional, rural and remote communities.