Mighty River Power Quarterly Operational Update

Quarterly Operational Update

Three months ended 30 September 2012

Highlights:

Electricity sales volumes to customers increased 6%, reflecting continued growth in business volumes
Overall generation volumes down 3%, with strong hydro volumes offset by lower gas-fired and geothermal generation
Generation purchase costs fell 19%, largely attributable to an improvement in relative North to South Island wholesale prices

Mighty River Power achieved a 3% lift in its electricity sales price to customers, from $115.63/MWh to $119.37/MWh; and a 6% increase in electricity sales volumes to customers on the prior comparable period (pcp).

Mighty River Power’s Chief Executive, Doug Heffernan, said the Company achieved an uplift of 22% in sales volumes to its business customers during the first quarter of FY2013; 721GWh compared with 589GWh in the same period in FY2012.

“The uplift in business volumes was driven by increased sales activity, particularly to our medium-sized commercial customers, ahead of increased competition in the segment and in anticipation of the commissioning of our Ngatamariki geothermal plant, which is due to move into commercial operation in mid-2013,” said Mr Heffernan.

Retail customer numbers were up 2% on pcp, and increased by 8,000 since year-end. Contributing to the increase was the migration of almost 5,000 pre-paid customers from Meridian to Mighty River Power’s GLO-BUG system in September.

Whilst the Company’s total generation volumes fell by 56GWh (3%) on pcp due to lower geothermal and gas-fired generation, hydro volumes were up 6% on the strong first quarter of FY2012.

Mr Heffernan said, “The increase was indicative of higher inflows into the Waikato River catchment than those seen during the same period last year, and attractive wholesale market prices in July and August.”

The 54GWh fall in consolidated geothermal volumes reflects the sale of 10% interest in the Nga Awa Purua geothermal station in April 2012 (34GWh), and a planned outage at Mighty River Power’s Kawerau geothermal station during the period.

Generation from the Company’s gas-fired plant at Southdown in Auckland was down 88GWh on pcp from 220GWh to 132GWh, reflecting lower wholesale prices.

The price Mighty River Power received for its generation sales fell from $79.13/MWh to $65.30MWh, ahead of the fall in wholesale market prices. Electricity purchases costs fell 19% from $84.19 in Q1 of FY2012 to $67.99 in Q1 FY2013, largely attributable to an improvement in relative North Island to South Island wholesale prices.

Storage in Lake Taupo ended the quarter at 416GWh, 22% above average, also reflecting the higher inflows and low wholesale prices in September.

The Net Contracts for Difference (CfD) at 406GWh was comparable with pcp. The significant increase in both buy and sell CfDs was due to location hedging.

ENDS

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