ERM Power has been a quiet achiever in the energy industry for more than 30 years. The company is here to change business energy in Australia forever.

1. BUSINESS ELECTRICITY CAN BE BETTER. MUCH BETTER. ERM POWER
HAS BEEN A QUIET ACHIEVER IN THE ENERGY INDUSTRY FOR MORE
THAN 30 YEARS. WE SPECIALISE IN SELLING ELECTRICITY TO BUSINESS
CUSTOMERS AND HAVE GROWN TO BECOME ONE OF THE NATION’S
LARGEST SELLERS OF ELECTRICITY. BUT WE DON’T JUST SELL ELECTRICITY.
WE OFFER UNRIVALLED CUSTOMER SERVICE AND VALUE FOR MONEY.
IT’S WHAT MAKES US DIFFERENT. IT’S WHAT MAKES US BETTER.
WE’RE HERE TO CHANGE BUSINESS ENERGY IN AUSTRALIA FOREVER.
SHAREHOLDER REVIEW 2012

2. ABOUT ERM POWER
ERM Power (ASX code: EPW)
is a diversified energy company
which aspires to be the preferred
energy supplier to business
customers across Australia.
THE ENERGY
BUSINESS
NEEDS.

3. CHAIRMAN’S AND
MANAGING DIRECTOR’S REPORT
SUCCESSFUL YEAR EARNINGS DRIVERS
In preparing this report we have reflected on the success of A major contributor to earnings was our electricity sales
the ERM Power group (Group) over the last 12 months and business, which boosted electricity sales volumes, revenue
the dynamic nature of the external environment over the and profits as it continued to expand around Australia with
same period. It has been a challenging time with significant a service offering focussed on large commercial and industrial
regulatory and market changes affecting all energy market customers. The business increased its market share,
participants. Yet over this period the Group has prospered, particularly outside Queensland, diversifying its customer
exceeding its prospectus forecasts for revenue, EBITDAIF1 base and accounted for 4%3 of all electricity sales by volume
and underlying net profit after tax1 for the second successive in Australia in July 2012. The quality of our service and
year, which is testimony to the strategy set by the board, product offering was confirmed when independent research
the execution of the business plan by management and the ranked ERM Power the No 1 electricity retailer for customer
experience and expertise of our people. There is no better service to business.
demonstration of our success than the expansion of our
The Group also seized the opportunity to increase our
electricity sales business which is forecast to become the
effective interest in the Oakey power station in Queensland
fourth2 largest electricity retailer in the National Electricity
from 12.5% to 83.33% and become the operator of the power
Market in FY2013 after just five years of operations.
station. This transaction has created significant value for
shareholders as the additional interest was purchased for
CHALLENGING ENVIRONMENT less than half the replacement cost of an equivalent new
A clear demonstration of the pace of change in the energy power station and without the construction risk. Some of
market is the fact that demand for electricity is weaker this value was recognised as a $19 million gain associated
than many would have expected. This can be attributed to with the discount on acquisition which, when coupled with
a range of factors including sluggish industrial activity in recurring earnings from the Oakey and Neerabup power
some parts of the economy, higher electricity costs, greater stations, made our generation business a major contributor
consciousness of the need to reduce energy consumption to to earnings in FY2012.
lower costs and help the planet, and increased introduction
As a peaking power station that is rarely required to operate,
of rooftop solar power. This has had a major impact on
Oakey will be in near-new condition when the current off-
generation development with market participants reviewing
take agreement ends in December 2014, providing a range
the timing of the need for new power stations on the eastern
of options to extract full value from this asset. The project
seaboard of Australia. Another major challenge is the Federal
debt is scheduled to be repaid in FY2015. The acquisition is
Government’s carbon pricing scheme which a year ago was
consistent with the strategy of strengthening our business
clouded by uncertainty but is now law and expected to have
model by increasing our vertical integration capability.
a significant impact across the Australian economy.
Another major milestone was achieved with our gas
However, we are well positioned to prosper in this
business moving closer to becoming a profit contributor in
carbon-constrained environment with gas-fired generation
its own right. Important in this regard was the signing of an
which has half the emissions of equivalent coal-fired
agreement for the sale of gas from the Red Gully and Gingin
generation producing the same amount of energy. We have
West fields in exploration permit EP 389 in Western Australia
development or environmental approval for four generation
to Alcoa.
projects in Queensland, New South Wales, and Western
Australia that are well located near gas supplies, electricity
and gas infrastructure and growing markets.
1
Refer to non-IFRS measures on page 19 of the ERM Power 3
Based on ERM Power’s actual electricity sales in FY2012 and our
Limited 2012 Annual Report for definitions. analysis of the volume of actual electricity sold in the National
Electricity Market in FY2012.
2
Based on ERM Power’s forecast league table for volume of
electricity sold in the National Electricity Market for FY2013.
The analysis draws on 2011 SRES scheme liability data, ERM Power
signed contracts and broad assumptions about the market and
participants. This is not an independently verified forecast.

4. PEOPLE AND COMMUNITY OUTLOOK
We had another safe operating year with no lost time injuries The future remains bright with our electricity sales business
or recordable environmental incidents and maintained our forecasting to maintain its strong growth, supported by
record of no permanent injuries over more than 30 years a first ever marketing campaign and further expansion of
of operations. We also maintained an active engagement the business into the small to medium enterprise (SME)
with the community through sponsorships, donations and market; our generation business expected to remain a major
partnerships with a focus on education, sport and the arts. earnings contributor; and our gas business moving closer to
becoming a profit centre in its own right. The Group remains
On behalf of the board we would like to thank the management
committed to creating value for shareholders as we pursue
team and all employees for their contribution to the growth
our aspiration of being the preferred energy supplier to
and success of the Group in the face of challenges over the
business in Australia.
last 12 months. We also want to acknowledge our fellow
directors for their support and guidance over this period
and thank ERM Power’s founder, Trevor St Baker, for his
valuable contribution as Deputy Chairman of the Board
and a consultant to the executive team.
Tony Bellas Philip St Baker
Finally, it is important to recognise all other stakeholders Chairman Managing Director and CEO
including customers, shareholders, suppliers and community
members for the important role they have played during our
second year as a listed company.
Share of Total Market (% of all retail electricity sold in Australia – GWh) Forward Electricity Sales Contracted (GWh)
2.3% 9,907
as of end of
July 10 June 2010
3.1% 14,261
as of end of
July 11 June 2011
4.3% 20,364
as of end of
July 12 June 2012
10.0%
Within
3-4 years Overall Customer Satisfaction - % of Customers “Very Satisfied”
7% Retailer E
Sales by Customer Industry Type (July 2012)
Gov’t Education Heavy Industry and
Healthcare Manufacturing 8% Retailer D
24% 29%
13% Retailer C
14% Retailer B
14% Retailer A
Mining and
Retail Property, et al ERM
Major Infrastructure 37% Power
23% 24%
ERM POWER SHAREHOLDER REVIEW | 2012

5. BUSINESS STRATEGY
ERM Power (ASX code: EPW) is a diversified energy To achieve this we seek to be competitive in sourcing product,
company which aspires to be the preferred energy highly efficient in our operations and innovative and market
supplier to business customers across Australia. leading in our service offering. To protect our business model
we continue to grow our vertical integration capability.
SALES ELECTRICITY GAS
ERM Power is licensed to sell ERM Power owns and operates ERM Power has interests in two
electricity in all Australian states 442 megawatts of low emission commercial discoveries and more
and territories and is the 4th 1 largest gas-fired power generation than 10,000 km 2 of exploration
seller of electricity in the National assets comprising 83.33% of acreage in Western Australia’s
Electricity Market. ERM Power the 3322 megawatt Oakey Power Perth Basin and New South Wales’
exclusively focuses on selling Station (Qld) and 50% of the Clarence Moreton Basin. These
electricity to business customers 3302 megawatt Neearbup tenements include conventional
and this segment of the market Power Station (WA). ERM Power gas, condensate, coal seam gas,
comprises approximately 12% of is one of Australia’s largest power oil and shale gas prospects.
all electricity customers and 70% development companies having ERM Power also holds strategic
of all electricity sold in Australia. led the development of more interests in other gas exploration
than 2,500 megawatts of companies.
power generation.
1
Based on ERM Power’s forecast league table for volume of electricity sold in the National Electricity Market (NEM) for FY2013. The analysis draws on 2011 SRES scheme liability data,
ERM Power signed contracts and broad assumptions about the market and participants. This is not an independently verified forecast.
2
Based on current or expected AEMO Winter Aggregate Scheduled and Semi Scheduled Generation Capacity, or generation capacity of registered facilities published by IMO (for WA).

6. THREE YEAR FINANCIAL HISTORY
FY12 FY11 FY10
$’000 $’000 $’000
INCOME STATEMENT
Total revenue and other income 937,926 549,814 418,403
EBITDAIF 85,390 46,407 68,684
Profit / (loss) for the year from continuing operations 36,567 16,219 (15,752)
Attributable to:
Equity holders of the Company 34,156 16,176 (16,865)
Minority interest 2,411 43 1,114
Underlying profit 30,312 6,245 9,218
Weighted average shares on issue 1
164,668 138,421 100,908
Underlying earnings per share – cents 18.4 4.5 9.1
1
Weighted average shares on issue adjusted in FY10 to compare on like for like basis following 2:1 share split in FY11.
STATEMENT OF FINANCIAL POSITION
Cash and cash equivalents 1 39,615 186,355 62,510
Property, plant and equipment 445,780 206,456 392,607
Other assets 196,647 97,791 206,974
Total assets 782,042 490,602 662,091
Borrowings 49,366 4,400 33,113
Borrowings – limited recourse 259,1 12 207,294 398,209
Other liabilities 291,808 121,209 185,524
Net assets 181,756 157,699 45,245
2
Cash and cash equivalents classified as part of assets held for sale excluded.
EBITDAIF BY SEGMENT
Electricity sales 30,948 22,458 9,455
Generation 63,377 29,047 33,944
Gas (1,001) (464) (733)
Other (7,934) (4,634) 25,968
Total EBITDAIF 85,390 46,407 68,684
OTHER INFORMATION
Dividends – cents per ordinary share3 8.50 3.50 -
GWh’s sold 8,268 5,646 4,065
Customer meters 4,545 2,059 863
D
ividends per ordinary share are for the applicable financial year and include dividends declared and paid after the end of the financial year.
3
The above information should be read in conjunction with the management This document may contain certain non-IFRS financial measures and other defined
discussion and analysis of the applicable annual report of ERM Power Limited financial terms. Investors and readers should take note of page 19 of the ERM Power
and the prospectus of ERM Power Limited issued in November 2010. Limited 2012 Annual Report, which contains a summary of these measures and a
All reference to $ is a reference to Australian dollars unless otherwise stated. definition of the financial terms used throughout this document. The directors believe
Individual items and totals are rounded to the nearest appropriate number or the presentation of these non-IFRS financial measures is useful for the users of this
decimal. Some totals may not add down the page due to rounding of individual document as they reflect the underlying financial performance of the business.
components.
ERM POWER SHAREHOLDER REVIEW | 2012

7. ASSETS AND OPERATIONS
Northern Territory Queensland
Braemar
land hub
Western Australia
550MW 500MW
332MW
Braemar South-West Braemar 3
Three Springs
Gas Pipeline Braemar 4
land hub South Australia
Three Springs 1 330MW
New South Wales
330MW
550MW
Wollar land hub
Kwinana
320MW
Wellington to Wellington land hub
Young Gas Pipeline Wellington 1
Assets in which ERM Power Proposed pipeline route Victoria
has a current interest and operates Morwell land hub
Assets fully divested which Gas and Condensate
ERM Power operates Exploration and Production
Gas and Condensate Exploration
Development approved assets
Tasmania
ERM Power’s strategic land sites Retail Operations
OUR VALUES OUR VISION
The core values that underpin our ERM Power aspires to be the
decisions and actions include:
People – care and respect for people preferred energy supplier to
and communities
business customers in Australia.
Planet – care and respect for the
environment
Performance – passion in our pursuit
of higher performance

8. Head office Sydney office Melbourne office Perth office
Level 5, Riverside Centre Level 26 Level 2 Level 4, St Georges Square
123 Eagle Street 25 Bligh Street 222 La Trobe Street 225 St Georges Terrace
Brisbane Qld 4000 Sydney NSW 2000 Melbourne VIC 3000 Perth WA 6000
Tel: (07) 3020 5100 Tel: (02) 8243 9100 Tel: (03) 9214 9333 Tel: (08) 9481 1100
Fax: (07) 3220 6110 Fax: (02) 9235 3898 Fax: (03) 9935 9439 Fax: (08) 9322 6154
www.ermpower.com.au
ERM POWER SHAREHOLDER REVIEW | 2012