The financial year recently ended has been full of events in terms of the development of Madrileña Red de Gas. The company has been in operation for seven years since its foundation in 2010, and has been established as a leading company in the natural gas distribution sector.
We have maintained the high levels of quality of service and safety that we had achieved in previous years and improved them. Similarly, we have continued to grow in size and we have very positive prospects for continuity in the medium term. Our customer service procedures are renewed and improved continuously.
First of all, I would like to refer to the work on investment and improvement of the network and, in particular, to the acquisition in May last year of 41,600 Repsol connection points, which are being transformed to natural gas at a higher rate than initially planned. Together with the continuous development activity in the network, this allows us to anticipate that we will have a total of more than 900,000 connection points in service in a period of three years, more than twice the network with which we started our journey in 2010.
We have developed other works to improve the network in relation to new issues, such as the segmentation of the network itself, and we have initiated a programme to extend telemetry. All this will help us improve management.
Within three years, MRG will have 900,000 connection points, more than twice the network it started with in 2010
An ambitious fraud detection, correction and prevention programme has also been launched to tackle a problem which, although not reaching serious levels, has recently seen a clear growth not only in gas but also electricity distribution networks. This programme requires joint action by companies and Administrations to address the problem of breach of contracts by some customers and those who actively promote this criminal activity.
Finally, good results are being achieved in the extension of the use of gas in those industrial sectors in which there was a clear unexploited potential, which, in addition to serving new customers, translates into a more efficient use of the network and contributes to the improvement of the company’s results.
The use of gas as clean energy is one of the fields undergoing the greatest development in its application to motor vehicles, specifically cars and fleets of buses. Madrileña Red de Gas has been a pioneer in the promotion of these applications. We have signed an agreement with a car manufacturer to facilitate the use of vehicles powered by compressed natural gas. We have also installed our first gas supply station for vehicles and we have renewed our own fleet of vehicles, which now use compressed gas as fuel.
All this does not only mean a significant improvement in air quality in the cities, a problem that is receiving growing attention worldwide (a gas-powered vehicle reduces by 96 % emissions of nitrogen oxides, the most worrisome pollutant from the health point of view), but it represents a saving of 30 % for users in the cost of fuel and a field of growth of our activity. The use of gas in transport is undoubtedly a necessary and irreplaceable solution in the short and medium term in the transition to a cleaner and more efficient energy.
It is also a sign of our commitment to the Community of Madrid, to invest in a quality and safe gas network providing Madrid citizens access to natural gas in all its possible uses, as our company has constantly done.
The excellence of this work was recognized with the energy efficiency award from Madrid City Council, a recognition that gives us great satisfaction and encourages us to continue in this line of ongoing improvement.
In addition to the new investment, the company has continued with its internal improvement policy. In this sense, we have maintained the level of results of previous years, despite the impact that the regulatory reform of 2014 had on revenues from regulated activities. And this does not detract from quality of service indicators, as can be seen in the pages of this Annual Report.
Operational safety remains our first priority. In this field, we maintain the rates that reflect our performance at high levels. This is our explicit commitment to customers, suppliers and society in general.
We are also working on improving our systems in order to simplify and facilitate interaction with our customers at all times when the relationship with the company becomes necessary: contracting, billing, claims, emergencies and incidents of all kinds.
The investment in the use of natural gas in transport has led to MRG receiving the energy efficiency award from Madrid City Council
Regarding the regulatory framework in which our activity is undertaken, what is most notable in the past year is stability, CHAIRMANwhich is the tendency since the implementation of the 2014 regulatory reform. This is perceived by investors, who continue to show high interest in the regulated energy sectors in Spain.
This stability in the medium and long term is essential for companies to develop their activity, designing business plans and investment decisions with medium and long-term expectations, maintaining the security of our shareholders’ investments and the level of quality of service for customers. We hope that, for the benefit of all, that stability, recognized and appreciated by the financial and business community, will be maintained, through the required communication and consultation with different sectors. It is clear that regulation in sectors such as energy requires ongoing fine-tuning, which must be carried out on the basis of a permanent dialogue with the actors, since they are the ones who know in detail the complex reality that we must manage daily, improving and updating the regulations that govern sector operation. The constructive dialogue that has existed in the recent past must continue and contribute to the development of a vital sector for the Spanish and Madrilenian economy, for the benefit of all stakeholders: companies, consumers and regulatory authorities.
Finally, I would like to express the gratitude of Madrileña Red de Gas to shareholders, who in this new stage continue to support the company’s development with a long-term vision. Also, to the management team and to all those who dedicate their professional activity to Madrileña Red de Gas, recognition for what has been achieved and the best outlook for what the future has to offer us.
Pedro Mielgo
Chairman
The data reflected in this report correspond to the annual financial year, between July 1, 2016 and June 30, 2017.