Operating Information, 3 months to 31 March 2011

5 July 2011

MIGHTY RIVER POWER – OPERATING INFORMATION

For the three months ended 31 March 2011 (UPDATED)

Updated commentary for the quarter (relating to wholesale electricity sales and purchases) previously unreleased due to Electricity Authority ruling on market pricing for the Undesirable Trading Situation on 26 March 2011[1]:

With national hydro storage at high levels over the period, average wholesale market prices were lower when compared with the same period in the previous year. The Company’s weighted average wholesale electricity price earned (GWAP) of $57.82/MWh was down on the $88.10/MWh for the prior comparable period. The cost of purchases from the wholesale market (LWAP) was also down to $62.95/MWh from $88.16/MWh for the same period in 2010. The resulting LWAP/GWAP ratio of 1.09 is higher than the prior comparable period at 1.00, reflecting a higher proportion of baseload geothermal and some wholesale price separation between the central and upper north island, exacerbated by the events of 26 March.

Mighty River Power’s renewable generation lifts to 98%

The new geothermal plant at Nga Awa Purua, along with improved hydrology driving higher output from the Company’s Waikato hydro assets, resulted in renewable generation making up 98% of Mighty River Power’s total volume of 1544GWh for the three months to 31 March 2011 (up from 87% in the prior comparable period). Reflecting the lower production from gas co-generation, the Company’s carbon emissions during the same period reduced by 30%.

GENERATION

Mighty River Power’s electricity generation volumes were up 6.3% (91GWh) on the same period in 2010. Geothermal accounted for 35% of production and hydro 63%.

Production from the new Nga Awa Purua plant drove geothermal volumes up 175GWh (48%) which, coupled with strong hydrology, contributed to reducing gas co-generation to just 2% of the total volume, substantially down on last year. Gas costs increased 4.6% to $8.48/PJ on the lower volumes.

In a period marked by high rainfall and flood events in the Waikato Region, hydro generation was up 7.3% (66GWh) on the prior comparable period. Due to hydro management activities throughout the entire river chain, undertaken in conjunction with the Waikato Regional Council as Flood Manager, Lake Taupo peaked at just 5cm over the upper operating level. These events resulted in the Taupo Gates operating at maximum for an extended period to maximise water outflow from Lake Taupo. Accordingly, not all water could be used at the downstream hydro stations resulting in spill past the stations equivalent to 134GWh (or 14%) of hydro generation for the quarter.

SALES

Despite a drop in customer numbers, residential sales volumes increased by 1% on the prior period reflecting the Company’s success in targeted acquisition and retention campaigns to increase the quality of the residential customer base. Total electricity market purchases fell 5.4% compared with the prior comparable period, primarily due to a loss of lower margin contracts in the commercial market as customers responded to the generally low spot prices of the past year.

Weighted average FPVV price increased to $106.44/MWh, up 5.6% on the prior comparable period, due to the introduction of the first stage of the Emissions Trading Scheme and an increase in energy prices in April 2010.

Mighty River Power’s active participation in the hedge market, along with the commencement of the Virtual Asset Swap (VAS) with Meridian Energy, which took effect on 1 January 2011, was reflected in much higher volumes of both buy and sell Contracts for Difference (CFD) compared with the same period in 2010.

[1]These figures are based on indicative final pricing from the Electricity Authority for 26 March, capped at $3,000/MWh. Final prices for 26 March will be processed according to the Authority’s timetable and are not expected to produce materially different figures to those shown.

ENDS

Please refer to the Operating Information table in PDF document attached.
[Mighty_River_Power_Operating_Information_to_31_March_UPDATED_FINAL.pdf]

[1]These figures are based on indicative final pricing from the Electricity Authority for 26 March, capped at $3,000/MWh. Final prices for 26 March will be processed according to the Authority’s timetable and are not expected to produce materially different figures to those shown.

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