20 May 2011
Genesis Energy Third Quarter Performance
Genesis Energy’s focus on growing its customer base in the South Island and retaining North Island customers through
improved customer services lead to improvement in customer numbers at the end of the third quarter (Q3) to 31 March
2011, according to its Q3 Operating and Performance Disclosure Statement.
This disclosure includes Genesis Energy’s operational information for the third quarter period ending 31 March 2011 and
for the nine month period ending 31 March 2011. The Company intends on reporting financial performance for the period
following the final decision of the Electricity Authority on its Undesirable Trading Situation investigation covering
events in the wholesale market on 26 March 2011.
During the Quarter, Genesis Energy launched an offer to sell up to $275 million Capital Bonds to investors. The net
proceeds of the Capital Bonds offer will be used by Genesis Energy as part of the funding for the acquisition of the
Tekapo A and B power stations, which comprise the 25MW Tekapo A power station, the 160MW Tekapo B power station and the
Tekapo canal linking the two stations.
The purchase price for the acquisition of the Tekapo Station is $821 million and the acquisition is anticipated to be
completed on 1 June 2011.
Energy retailing
Genesis Energy continued its successful South Island customer acquisition campaign in Q3 2010/2011. Electricity
customers were up 4,200 (1%) at 544,000 compared to 539,800 in the same quarter last year. Gas customer numbers were up
3.3% at 111,500 compared to 107,900 in the Q3 2009/2010. LPG customers were also up by 3,400 at 4,200 in the third
quarter compared to 800 in Q3 2009/2010.
In Q3 retail electricity sales at 1,228GWh were down by 140GWh on the same period last year. Gas sales at 0.7PJ in Q3
2010/2011 were similar to last year and LPG sales were up 176 tonnes to 212 tonnes compared to the same quarter last
year.
The company continues to make good progress on its programme to roll out Advanced Meters to its customers. At the end of
March 2011, Genesis Energy had a total of 150,692 Advanced Meters installed with 26,943 Advanced Meters being installed
in the third quarter. Installation rates are around 2,500 Advanced Meters per week.
On 17 March 2011, the company introduced to its customers with Advanced Meters the capability to view their consumption
data online. The Energy Usage service provides customers with a range of graphs showing hourly, daily and monthly
electricity consumption. The service is available via My Account on the Genesis Energy website.
Generation
Generation volumes from Genesis Energy’s mix of hydro and thermal power stations in the North Island were impacted in
the third quarter by high inflows and above average lake storage levels. The wet conditions contributed to low average
wholesale prices in the wholesale market over Q3. However, the wholesale market did experience some large wholesale
price events during the third quarter period.
On 6 May 2010, the Electricity Authority (EA) released its draft decision on an alleged Undesirable Trading Situation
(UTS) which occurred on 26 March 2011. The UTS involved interim wholesale spot prices exceeding $19,000 per MWh at
certain nodes during a transmission constraint in the Upper North Island. The EA has ruled that a UTS (as defined by the
market rules) did occur and it is proposing to reset prices at values between $1,500/MWh and $3,000/MWh rather than the
approximately $19,000/MWh level that wholesale spot prices reached on 26 March 2011.
The EA noted that Genesis Energy had acted at all times within the rules, had not engaged in manipulative or misleading
conduct and had not breached any law. Genesis Energy has reviewed the preliminary conclusions, and made a submission to
the EA on the draft decision on Friday, 13 May 2011.
Genesis Energy’s total generation in Q3 for 2010/2011 was down 23% at 1,377GWh, compared to 1,793GWh in the same quarter
last year. Generation for the nine months 2010/11 at 4,912GWh was down 14% on the same period last year.
Thermal generation was down 34% at 945GWh in Q3 2010/2011 compared to 1441GWh in Q3 2009/2010 reflecting lower
generation from Huntly Units 1 to 4 (down 62%) and Unit 5 (down 9%).
Renewable generation was up 23% at 433GWh for Q3 2010/2011 compared to 353GWh in Q3 2009/2010, reflecting higher
generation from both the Tongariro Power Scheme (up 24%) and the Waikaremoana Hydro Scheme (up 22%).
Disclosure Statement
The Genesis Energy Third Quarter Operational Performance Statement is available on the Genesis Energy Disclosure
Statement website (genesisenergy.co.nz/aboutus) and on the Crown Ownership Monitoring Unit website (www.comu.govt.nz).
ENDS